Steel Times International January February 2024

DECARBONIZATION

AUTOMOTIVE

DIRECT REDUCED IRON

ARTIFICIAL INTELLIGENCE

Kobolde & Partners’ Rutger Gyllenram on climate change

Myra Pinkham on North American light vehicle production

Two excellent articles from Midrex Technologies and Tenova HYL

PSI’s Heinz-Josef Ponten on optimizing hybrid steel plants

Since 1866

www.steeltimesint.com January/February 2024 - Vol.48 No1

IRONMAKING SOLUTIONS FOR A SUSTAINABLE FUTURE

JAN FRIEDEMANN PLAUL  EXCLUSIVE INTERVIEW STI 2024.indd 11 STICover coverJan adFeb 1.2023.indd

23/01/2024 1/6/23 10:29:05 10:56 AM

CONTENTS – JANUARY/FEBRUARY

Cover courtesy of Midrex FlexTM: Moving from natural gas to hydrogen in decarbonizing ironmaking

EDITORIAL Editor Matthew Moggridge Tel: +44 (0) 1737 855151 matthewmoggridge@quartzltd.com Assistant Editor Catherine Hill Tel:+44 (0) 1737855021 Consultant Editor Dr. Tim Smith PhD, CEng, MIM Production Editor Annie Baker Advertisement Production Carol Baird SALES International Sales Manager Paul Rossage paulrossage@quartzltd.com Tel: +44 (0) 1737 855116 Sales Director Ken Clark kenclark@quartzltd.com Tel: +44 (0) 1737 855117

2 Leader

By Matthew Moggridge.

26 Cover Story Steel – it’s all happening

4 News round-up The latest global steel news.

30 Automotive Bumps in the road

7 USA update Pollution and politics.

33 Artificial intelligence Optimizing hybrid steel plants.

9 Latin America Ternium Pesquería: Backwards integration.

38 Direct Reduced Iron Net-zero steel before tomorrow.

11 India update Rising imports, falling demand.

14 Steelmaking Opportunities ahead.

Chief Executive Officer Steve Diprose SUBSCRIPTION Jack Homewood Tel +44 (0) 1737 855028 Fax +44 (0) 1737 855034 Email subscriptions@quartzltd.com

44 Direct Reduced Iron ENERGIRON®: solving climate challenges.

50 Perspectives: Daiwa Steel Tube Industries Striking a balance.

17 Decarbonisation It is all about survival.

Managing Director Tony Crinion tonycrinion@quartzltd.com Tel: +44 (0) 1737 855164

1

52 History A vanished plant: Part 1, 1867-1899

21 Hot working A new approach to metal flow

14

Steel Times International is published eight times a year and is available on subscription. Annual subscription: UK £226.00 Other countries: £299.00 2 years subscription: UK £407.00 Other countries: £536.00

26

3 years subscription: UK £453.00 Other countries: £625.00 Single copy (inc postage): £50.00 Email: steel@quartzltd.com Published by: Quartz Business Media Ltd, Quartz House, 20 Clarendon Road, Redhill, Surrey, RH1 1QX, England.

Tel: +44 (0)1737 855000 Fax: +44 (0)1737 855034 www.steeltimesint.com Steel Times International (USPS No: 020-958) is published monthly except Feb, May, July, Dec by Quartz Business Media Ltd and distributed in the US by DSW, 75 Aberdeen Road, Emigsville, PA 17318-0437. Periodicals postage paid at Emigsville, PA. POSTMASTER send address changes to Steel Times International c/o PO Box 437, Emigsville, PA 17318-0437.

Printed in England by: Stephens and George Ltd • Goat Mill Road • Dowlais • Merthyr Tydfil • CF48 3TD. Tel: +44 (0)1685 352063 Web: www.stephensandgeorge.co.uk

21

©Quartz Business Media Ltd 2024

ISSN0143-7798

www.steeltimesint.com

Contents.indd 1

23/01/2024 11:55:09

2

LEADER

The steel industry continues towards net-zero...

Matthew Moggridge Editor matthewmoggridge@quartzltd.com

www.phoenixtm.com

Comprehensive • Passes through furnace with Slab • Get an accurate Slab temperature profile • Measurement at up to 20 points • Live 2 way radio communications

the next few years as they edge towards a position where they can claim that, as near as damn it, they’re producing fossilfree steel or green steel or almost green steel depending on the technologies they deploy and the standards they wish to adhere to. While some will be able to claim that they offer the gold standard – H2 Green Steel and SSAB are in this category – others will have to accept that they don’t and those who, through their own circumstances, continue with the ‘villainous’ blast furnace will have to rely upon the countless technologies available to reduce their carbon footprint as much as possible. ‘The greener, the better’ will be the mission statement of the moment.

It’s a funny old world. It’s strange that in the USA 70% of steel production comes from electric arc furnaces whereas on a global level 71% of steel is produced in blast furnaces. In other words, there’s plenty of work still to be done, but the steel industry is on the case and always has been in my opinion. The future for our industry is bright because steel is a very important material; it is versatile and infinitely recyclable and the world would be lost without it.

It’s almost a cliché to start the leader of the January 2024 issue of any magazine with a phrase like ‘as we embark upon the new year’, or to discuss new year resolutions or that ‘Christmas is behind us and it’s time to be getting on with stuff’. So, I’m not going down that road, I’ll leave it to other editors to make that sorry mistake. And besides, I can make a paragraph out of discussing how I’m not going to be laying down a cliché-ridden leader. Perhaps I ought to wish you all a Happy New Year, although it’s a bit late in the day, it’s 22 January for heaven’s sake.

What I will say is that the year has hardly started (now there’s a cliché) and already the big news stories are rolling in like gigantic waves off the Cornwall coast as the UK experiences the delights of Storm Isha, which, as I write this, must have moved on because it’s blue skies and sunshine out of my window as I write this.

The biggest news story so far has been the announcement that Tata Steel UK is to shed almost 3,000 jobs as it pushes ahead with it’s decarbonization strategy – meaning it’s ditching it’s blast furnaces and going electric and basically following the path many steelmakers will take over

Temperature Profiling Solutions In the Steel Reheat Industry

Safe • Safe system installation without production delays

• Reliable protection of data logger up to

Easy • Optimise your process accurately • Validate your furnace mathematical model.

1300°C

Benefits • Optimise furnace programs • Save energy and increase production • Obtain optimal drop out temperatures • Minimise scale build up • Prevent hot roller wear & tear

unts !

e co Where experienc January/February 2024

Leader..indd 1

PhoenixTM Ltd UK sales@phoenixtm.com

PhoenixTM GmbH Germany info@phoenixtm.de

PhoenixTM LLC USA info@phoenixtm.com

www.steeltimesint.com

23/01/2024 10:43:55

#turningmetalsgreen

At SMS group, we have made it our mission to create a carbon-neutral and sustainable metals industry. We supply the technology to produce and recycle all major metals. This gives us a key role in the transformation towards a green metals industry.

4

NEWS ROUND-UP

South Korean steel giant POSCO has successfully concluded the initial phase of constructing its nonoriented electrical steel sheet plant, known as Hyper NO, at Gwangyang Steel Works.

The plant aims to cater to the increasing demand emerging from the electric vehicle and high-end appliance sectors.

Commencing in April 2022, the construction of the Hyper NO plant involved a substantial investment of KRW 1 trillion. Once fully operational, the plant is cited to have a production capacity of 300kt/yr.

Source: Chem Analyst, 4 January 2024.

More than 1.1kt of UK-based steelmaker British Steel’s product has been successfully installed as part of the revamp of Northern England’s Darlington Station. The steel frame of the new gateway and multi-storey car park on the east side of the station is now in place as part of the £150m project. Construction chiefs say the gateway project is running on time, despite the wet weather, with the whole

JSW Steel subsidiary – JSW Utkal Steel – has acquired 2,677.80 acres of forest land in Jagatsinghpur, Odisha where it intends to set up a 13.2Mt integrated steel plant. The company had already got environmental clearance from the Union Ministry of Environment & Forest and Climate Change in April, 2022, which was then re-validated by the Ministry in September last year, with some additional conditions of ownership.

Source: The Economic Times, 5 January 2024.

project set to be completed in 2025.

Source: Bdaily News, 10 January 2024.

Steelmaker ArcelorMittal is preparing to resume output at its Bosnia plant, a company source said, after halting production in November due to a drop in steel demand in Europe. The plant will also resume taking deliveries of iron ore from the ArcelorMittal Prijedor mines it runs in northern Bosnia, the source said. The head of ArcelorMittal Zenica's trade union, which signed a wage bargaining agreement with management following a two-month strike, said that two of the plant's operations, including a blast furnace, will restart this month. Source: Reuters, 9 January 2024.

Switzerland-based steelmaker Swiss Steel plans to supply carbon-reduced steel, branded as ‘Green Steel Climate +’, to German metal processing company SFB Group, starting this month. The steel is manufactured exclusively with electricity from renewable sources. The companies have also partnered on a project within the hydraulics sector, which aims to enable

Truck manufacturer Scania has signed a letter of intent with its principal steel supplier SSAB to decarbonize all steel deliveries for its heavy-duty vehicles in 2030. Deliveries of SSAB’s fossil-free steel are planned to ramp up from smaller amounts starting in 2026 and, says Scania, will be key in the shift towards a sustainable transport system.

Scania says the new deal is a next step in the long-standing relationship, and will lead to radically lowered climate emissions.

Source: CBW, 9 January 2024.

thermomechanical rolling to further process any conventionally produced standard steel.

Source: Steel Orbis, 11 January 2024.

Conares, the UAE’s second-largest steel manufacturer, has announced its commitment to achieving net zero carbon emissions by 2050, aligning with the UAE's 2050 environmental goals.

Conares is set to cut emissions by 50% by 2040 and reach net zero by 2050. Bharat Bhatia, chairman and CEO of Conares, said: "Under the visionary guidance of the UAE, Conares is not just adapting to a sustainable future; we are actively crafting it. Our pledge to achieve net zero by 2050 reflects our commitment to the nation's environmental aspirations and our ambition to redefine the standards of green manufacturing in the region.

Source: ZAWYA, 11 January 2024.

Industry news.indd 1

23/01/2024 10:39:16

NEWS ROUND-UP

Erdemir, the largest steel producer in Turkey, has pledged $3.2 billion to cut its emissions by a quarter before 2030, according to a report

by Reuters. The integrated steel mill will utilise biomass and natural gas to reduce coal consumption. In the meantime, the company will build new electric arc furnaces at its facilities in the north and south of the country, according to Serdar Basoglu, CFO of controlling shareholder OYAK Mining Metallurgy. He said that current capacity of 9.5Mt of crude steel is expected to increase to 13.5Mt with the introduction of electric arc furnaces.

Source: Bioenergy Insight, 12 January 2024.

Software giant Microsoft and carmaker Volvo have voiced their support for the newly founded Sustainable Steel Buyers Platform, with plans to incorporate 2Mt of ‘green steel’ into their operations. Other supporters include solar hardware maker Nextracker and US real estate firm Trammell Crow.

The Sustainable Steel Buyers Platform was established to build a bridge between

Tata Steel’s Netherland subsidiary has announced plans to install DeNOx technology at its pellet factory, and build a wind screen around its raw material storage facility, with the aim of accelerating the reduction of emissions in IJmuiden. The projects are expected to reduce the pellet factory’s nitrogen emissions by 80%. The installation of the technology will take around two years, with the steelmaker having signed a contract for the project to be completed by the end of 2025.

Source: Steel Orbis, 12 January 2024.

potential green steel buyers and steel manufacturers.

Source: Recycling International, 17 Jan 2024.

Blast furnace no. 5 at Liberty Steel's Galati plant in Romania was taken off-line during the Christmas period, shortly after its restart in mid-December last year. Disruption to raw material supply was cited as the main reason for the idling.

This has been a recurring problem for the steelmaker, which originally idled the no.

5 blast furnace in October as adverse weather conditions prevented raw materials from reaching the site. The company is still producing hotrolled coil from imported slab and aims to have the unit back on-line in the coming weeks.

Source: Argus Media, 15 January 2024.

Element Zero, a green materials platform company, has announced that it has raised $10 million in seed funding, with proceeds to be used to scale up its platform aimed at decarbonizing iron and other critical metals

5

ArcelorMittal Kryvyi Rih has sent UAH 269 million to ‘help in the fight against Russian aggression and for those affected by the war’.

According to a company press release, priority areas of assistance were urgent large-scale infrastructure projects and assistance to the Ukrainian defense forces and communities. ArcelorMittal Kryvyi Rih is the largest producer of rolled steel in Ukraine. It specializes in the production of long products, in particular rebar and wire rod.

Source: Interfax Ukraine, 17 January 2024.

production. Founded in 2022, Element Zero offers a platform for the conversion of iron ore and other metals into their pure metal form with zero carbon emissions, using a non-aqueous electrochemical process to process the full spectrum of iron ores at a lower temperature – that can run on intermittent renewables like wind, solar, and hydropower. The company said that it uses 30-40% less energy per ton of iron than coal and gas-based processes. Source: ESG Today, 18 January 2024.

Tata Steel has confirmed that it is cutting 2,800 jobs across the UK, including 2,500 at its Port Talbot site. The company is closing its blast furnaces at Port Talbot and replacing them with an electric arc furnace, which produces less CO2 but requires fewer workers. The UK government will contribute £500m towards the £1.25bn cost of the electric arc furnace. UK prime minister Rishi Sunak says the alternative was the entire plant being closed.

Source: BBC, 19 January 2024.

Industry news.indd 2

23/01/2024 10:40:37

Online Auction Sale Excellent Schumag Bright Bar Drawing Lines, Draw Benches, Bar Processing Equipment, Overhead Cranes, Bar Drawing Dies previously used by Barrett Steel (formerly Artee Bright Bar Ltd) Bidding Ends: Thursday 22nd February 2024 at 3.00pm (UK Time) Offers Considered Prior to Auction ·Draw Benches: 100 Ton Aetna Standard Bar Draw Bench 60 Ton Platt Mair Draw Bar Draw Bench 40 Ton Custom Bar Draw Bench ·Tube/Bar Straighteners: 2-Roll Bronx 6 Tube/Bar Straightener 2-Plane 16 Roll Blaw-Knox Bar/Profile Straightener 2-Roll Farmer Norton Tube/Bar Straightener ·Schumag Drawing Lines: Schumag KZRP-IIIB Combined Drawing Line with Inline Shotblast, Polishing & Chamfering Schumag/Casa Grande KZRP-IIBF Flat Bar Combined Drawing Line Schumag KZRP-IIB Combined Drawing Line Schumag KZRP-IIB Combined Drawing Line Schumag KZRP-IS Combined Drawing Line Schumag Double End Chamfering Machine ·Shot Blast Machines: 21 Meter Pangborn Through-Feed Shot Blast Machine (1999) 21 Meter Pangborn Through-Feed Shot Blast Machine (1995) 60” W x 24’ L George Fischer Fl-4-30/110 Through-Feed Bar Shot Blast Line ·Band Saw : Missler Model. Deb-540CE Horizontal Band Saw (2006) ·Plus Many Others...

For Full Information please visit our Website: www.cottandco.com ▪ For Further Information please contact our Office: ▪ Cottrill & Co, 401—407 Tyburn Road, Erdington, B24 8HJ ▪ Tel: + 44 (0) 121 328 2424 ▪ Email: info@cottandco.com ▪ Cottrill & Co is a Trade Name of Cottrill & Associates Ltd

USA UPDATE

7

Pollution and politics

Amid the steel industry’s improving sentiment, US senators have urged the Evironmental Protection Agency to reconsider its emissions regulations. By Manik Mehta* THE overall business sentiment prevalent in the steel industry in the United States seems to have improved following the rallying in prices of various product categories. This is the conclusion drawn by S&P Global from a recent survey it conducted among steel producers, traders, and consumers – with nearly 72% of those surveyed expecting a rise in rolled steel prices in December, contrasting with 68.6% in November.

Indeed, nearly 18% expected significant price increases while just 2.1% expected a slight price decline in December.

However, 56.4% of those surveyed also felt that steel production would not change in December, against 60% in November, while 33% of the surveyed persons expected it to rise in December.

Meanwhile, the steel industry’s concern over some emission regulations received support from eight senators, with both Republicans and Democrats urging the nation’s environment watchdog body, the Environment Protection Agency, to reconsider three proposed emission regulations for the steel industry. The eight senators comprised of four of each party, with two each from Indiana, Ohio and West Virginia and one each from Minnesota and Pennsylvania.

According to a statement issued by

Senator Sherrod Brown (Ohio), one of the co-signatories of the letter to the EPA, three of the EPA’s proposed regulations would ‘dramatically undermine America’s steel industry, hurt Ohio steel manufacturers and steelworkers, and ship Ohio steel jobs overseas’.

The three regulations, related to the blast furnace/basic oxygen furnace sector, are the National Emission Standards for Hazardous Air Pollutants: Integrated Iron and Steel Manufacturing Facilities; National Emission Standards for Hazardous Air Pollutants for Coke Ovens: Pushing, Quenching, and Battery Stacks, and Coke Oven Batteries; and National Emission Standards for Hazardous Air Pollutants: Taconite Iron Ore Processing Amendments.

The eight senators were backed by the United Steelworkers (USW) and steelmaker Cleveland-Cliffs.

In a statement, Cleveland-Cliffs’ CEO Lourenco Goncalves emphasized his company’s ‘positive track record’ of investing over $1 billion to promote steel decarbonization and ‘meaningfully reduce our environmental impact’. He added: “However, these EPA proposed rules are not technically feasible or scientifically justified.”

Donnie Blatt, the director of the USW District 1 in Columbus, Ohio, pointed

out that the USW had a long history campaigning to reduce hazardous atmospheric air pollution, a responsibility it did not take lightly. But Blatt cautioned that the proposed amendments would result in significant cost increases and jeopardize good paying jobs in local economies throughout the US. “The EPA should further consider revising these amendments responsibly to allow US steel companies to compete globally and still achieve their desired goals.”

The eight senators argued that the proposed regulations risked undermining the domestic steel industry and national security while driving production overseas which, anyway, would not contribute to any net emission reduction. “We support reducing harmful air pollution,” the letter says. “We also support rules that are durable, realistic and based upon proven technology, and reflect a consensus view among stakeholders on how to best improve public health while protecting good paying jobs and supporting industries essential to our national and economic security. These rules fail to meet those standards.”

US steelmakers are eyeing the $ 1.2 trillion Infrastructure Investment Act for upgrading the infrastructure, using

*US correspondent, Steel Times International www.steeltimesint.com

USA Update.indd 1

January/February 2024

22/01/2024 11:22:44

8

USA UPDATE

Eric Smith, Tech Hubs

Joshua Builta from OMDIA

Alejandra Y Castillo of the Department of Commerce

domestic steel. The Act provides $550 billion for new initiatives to rebuild roads and bridges, improve public transit, and replace lead pipes. Moreover, the Inflation Reduction Act and the CHIPS and Science Act will spur demand for domestic steel in the US. US steel producers expect to benefit from strong demand across major enduse markets, particularly automotive and construction, resulting in higher order bookings. Steel demand in automotive is expected to rise, buoyed by easing a global shortage in semiconductor chips that was slowed down the automotive industry for nearly two years.

Steel producers expressed relief over the recent agreement reached between the United Auto Workers (UAW) and the ‘Detroit Big Three’ automobile manufacturers in November 2023, bringing to an end the six-week long strike that caused a slowdown in automotive demand and declining steel consumption. Steel pundits expect the agreement to strengthen steel demand.

Besides robust demand for steel in the non-residential construction market, demand in the energy sector has also improved, supported by strong oil and gas prices which are seen as a positive development by the steel industry.

The latest Sikich Industry Pulse Report suggests that while use of generative AI is spreading across industries, the manufacturing sector has not fully exploited AI’s potential. The report says that despite labour shortages, one-fifth of manufacturing executives had no plans to use AI in their operations, and over 60% of executives were unsure of AI’s

benefit to their companies. Less than 20% of manufacturers had begun using AI technologies.

The recent AI Summit 2023 in New York was transformed into a gigantic business platform for discussions between customers and AI experts and providers on improving productivity and reducing costs.

in industry, saying that ‘over half of all companies surveyed by us felt that AI would become the ‘new normal’. ‘‘AI can help alleviate some of the labour shortages of some western countries in specific industries”, Bulta concluded.

Meanwhile, two senior US officials, Alejandra Y. Castillo, assistant secretary of commerce for economic development at the Department of Commerce, and Eric Smith, Tech Hubs’ programme director, economic development administration, recently informed journalists at the New York Foreign Press Centre about the ‘Regional Tech Hubs to Catalyze Innovation in Technology’ for which the US administration has pushed four major pieces of legislation – the American Rescue Plan, the bipartisan infrastructure law, the CHIPS and Science Act, and the Inflation Reduction Act – which serve as springboards for investments driving economic growth and technology.

Under the Infrastructure Investment and Jobs Act, as well the Chips Act, the administration designated 31 tech hubs across many cities that were not on the steel industry’s radar.

The Tech Hubs programme, authorized under the CHIPS and Science Act, highlights the economic potential of cities like El Paso, Texas, for manufacturing; Wichita, Kansas for aerospace, and North Hampshire for biotechnology. The 31 hubs are spread from central Missouri to New England to the West Coast, the Southeast, and the Upper Midwest. “These are not your common areas. These are not the common Silicon Valley places across the country. But they are places in the US that are really … at the forefront of innovation,” Smith said.�

January/February 2024

USA Update.indd 2

Joshua Builta, a research director who heads the research team for AI and IoT at OMDIA, part of Informa Tech, a technology research and advisory group, shared his insights on tech markets. “I can say that there will be no large industry, including the steel industry that will not be impacted

by AI”, he told a correspondent at the AI Summit New York. His organization had been talking to several industries on increasing productivity and reducing costs.

“AI is being used in infrastructure and for smart transportation and smart cities that can improve the lives of people. Technology development is moving very fast.”

Bulta underscored AI’s importance

www.steeltimesint.com

22/01/2024 11:23:03

9

LATIN AMERICA UPDATE

Ternium Pesquería: Backwards integration Steel slab at Ternium’s Brazil plant

Latin American steel producer Ternium is due to make substantial investments in its Mexican plant, which bears commentary on the current conditions of the flat steel market.

By Germano Mendes de Paula* TERNIUM has announced large investments in its Pesquería plant, located in Nuevo León, north of Mexico. But before analysing these projects, it would be useful to look at the Mexican flat steel market.

According to the country’s National Chamber of Iron and Steel Industry (Canacero), flat steel output improved marginally from 8.9Mt in 2017 to 9.2Mt in 2022 (Graph 1). Meanwhile, imports diminished from 9.3Mt to 8.5Mt, respectively, while exports enhanced from 1.5Mt to 2.3Mt. Consequently, apparent consumption declined from 16.8Mt to 15.3Mt between 2017 and 2022.

Net import penetration (imports minus exports as a proportion of apparent consumption) dropped from 46.7% in 2017 to 40% in 2022. The net import penetration (imports minus exports as a proportion of apparent consumption) dropped from 46.7% in 2017 to 40% in 2022. This being said, it continues to be high enough to foster investments in Mexico’s flat steel market which is aiming to substitute imports.

PESQUERÍA Ternium has been investing in its Pesquería plant since the early 2010s. In 2013, a

cold-rolling mill and a HDG line came on stream (Tenigal, a 51:49 joint venture with Nippon Steel). Additional HDG and painting lines were commissioned in 2019. A major development took place in 2021, when it started up a hot strip mill. Currently, Pesquería’s nominal capacity comprises of a 4.4Mt/yr hot strip mill, a 1.7Mt/yr cold-rolling mill, 860kt/yr HDG lines (both

Graph 1: Mexican flat steel market, 2017-2022 (Mt)

belonged to Tenigal) and a 140kt/yr prepainted line.

In February 2022, Ternium announced a $1 billion investment package in Pesquería. It consists of a 550kt/yr pickling line, new finishing lines (expected to be commissioned by mid-2024) and a 1.6Mt/ yr cold-rolling mill and also a 600kt/yr HDG

(planned to commence operations by the end of 2025). The company is enhancing its product mix and aiming to substitute imports. The slabs are predominantly provided by Ternium Brasil (previously, Thyssenkrupp Companhia Siderúrgica do Atlântico, CSA) located in Rio de Janeiro.

Despite these investments, Ternium’s financial situation is quite comfortable. At the end of 2022, it had a net worth of $2.6 billion. Taking advantage of its financial success, the company unveiled additional projects regarding the Pesquería plant, as described below.

In February 2023, Ternium announced the construction of an EAF to be located in the United States-Mexico-Canada Agreement (USMCA) region. It also announced that it will build a 2.1Mt/ yr DRI module, to produce iron metallic feedstock for the 2.6Mt/yr EAF, which will also consume scrap. Both operations are expected to come online in H1 2026.

The new EAF will supply slabs to its Pesquería rolling operations in Mexico, allowing its steel sheet and coil products to comply with the USMCA’s ‘melt and pour requirements’ for the North American auto industry. The USMCA includes a stipulation requiring automakers in the USA, Canada, � 12

* Professor in Economics, Federal University of Uberlândia, Brazil. E-mail: germano@ufu.br www.steeltimesint.com

Latin America.indd 1

January/February 2024

22/01/2024 11:53:44

Register today at AISTech.org

6–9 May 2024

Steel’s Premier Technology Event

Premier Sponsor THE GROUP

Global Sponsors

Greater Columbus Convention Center \\ Columbus, Ohio, USA

11

INDIA UPDATE

Rising imports, falling demand Indian steel mills are tackling a trifecta of challenges; climbing imports, dropping demand, and squeezed profit margins, forcing the government to consider safeguarding measures.

By Dilip Kumar Jha* STEEL mills in India are facing tremendous pressure due to a substantial increase in imports that began earlier this year, despite domestic overcapacity. Credit rating agency Icra Ltd expects the operating environment of the domestic steel industry to become more challenging during the peak demand season of the next three months, due to squeezed profit margins between elevated raw material costs and weakening steel prices.

In the second half of the current financial year – April 2023 to March 2024 – the steel industry’s operating profit margins are expected to remain lower compared to the first half – April to September 2023. This is largely driven by squeezed profitability from blast furnace operators, which contribute approximately 46% to India’s total steel production. The operating profit margins of secondary steelmakers through the EAF route are slated to outperform blast furnace operators in the short term. This scenario has increasingly emerged within the steel manufacturing sector, changing the production cost environment in tandem with coal prices. While seaborne coking coal prices have been volatile since July 2023, thermal coal prices have remained rangebound. India remains a large importer of coking and thermal coal. While domestic hot rolled coil (HRC) prices were corrected by 6.7% since early October 2023, rebar prices witnessed a more moderate fall of 4.7% in the same period.

Share of major countries in India’s steel import in October (%) County

2022

2023

China

26.5

32.7

Korea

33.9

29.9

Vietnam

4.7

16.3

Japan

16.5

14.3

Thailand

2.4

2.1

Nepal

0.7

2.1

Taiwan

0.7

0.3

Others

14.7

2.3

Source: Ministry of Steel, government of India

India’s month-wise steel import in 2023 Month

Quantity (Mt)

April

0.460

May

0.457

June

0.484

July

0.587

August

0.530

September

0.381

October

0.571

April-October

3.47

Source: Ministry of Steel, government of India

India’s current steel supply scenario (Mt) April – October

Crude steel production

Finished steel production

Consumption

2019

63.98

59.94

59.82

2020

53.52

48.41

45.93

2021

67.71

63.79

58.81

2022

71.53

68.43

65.94

2023

81.74

77.30

75.66

Source: Ministry of Steel, government of India

Rising imports India’s average monthly steel imports stand at around 0.5Mt, accumulating to

3.47Mt between April and October 2023.

Data compiled by the Union Ministry of Steel shows that India’s steel imports

*India correspondent, Steel Times International www.steeltimesint.com

India Update.indd 1

January/February 2024

22/01/2024 11:20:15

12

INDIA UPDATE

steadily increased to 571kt in October, marking a 50% jump from 381kt reported in the previous month. The volume of India’s imports comprises 58% of India’s cumulative 6.02% of the amount witnessed in 2022-23, but represents 75% of the overall steel imported in 2021-22. During the April-October period, India’s steel imports recorded an increase of over 10% from the corresponding period of the previous year.

According to Jayanta Roy, senior vice president at Icra Ratings Ltd, “Domestic steel prices were at a premium to seaborne prices for most of the April-September 2023 period. However, the correction in domestic prices in the October–December 2023 quarter has brought in greater price parity with international steel prices now.

This somewhat mitigates the risks of a further spike in steel imports in the coming months. That said, with India remaining among the few bright spots in global steel markets at present, India’s current year net finished steel exports are poised to reach the lowest level since 2018-19.”

To reach a total output facility of 300Mt/ yr by 2030, as per the latest steel policy, India has been consistently expanding its steel production capacity, which currently stands at around 155Mt/yr. However, the country’s crude steel production stood at 125.35Mt/yr in 2022-23. Indian mills produced 81.74Mt of crude steel during the April-October 2023 period, marking an increase of 14% from 71.53Mt reported in the corresponding period last year. Thus, Indian mills’ capacity utilization continues to hover around 80%. Indian mills possess a crucial inventory of 2.0-2.5Mt to intervene in the market as and when demand picks up. Furthermore, Indian steelmakers have been on a capacity expansion spree, with around 38.5Mt/yr of new output expected to come on stream by 2026-27.

The government’s infrastructure-oriented growth model has been supporting India’s steel demand since the beginning of F2021-22, with steelmakers witnessing the strongest period of consumption growth recorded over the last 15 years.

From April to October 2023, domestic

steel consumption remained strong at 15% year-on-year (yoy) growth, driven by the government’s frontloading infrastructure spending ahead of the upcoming Union Elections in 2024. This has helped steelmakers to achieve a capacity utilization average of 83% between April and October 2023.

project. With sustainability in mind, the new slab mill will be equipped with carbon capture capabilities and readiness to switch from natural gas to hydrogen used for DRI production. Additionally, the company said all water used in the facility’s production process will be sourced from wastewater treated for industrial use.

the Consteel EAF with hot DRI, thanks to the Hytemp pneumatic transport system.

Additionally, the module includes a carbon capture technology and will be prepared for use of hydrogen.

In summary, Ternium is investing $3.2 billion in its Pesquería plant, following its strategy to enhance product mix (as usual), but also to promote backwards vertical integration. Following on from the investments, it will be a DRI integrated mill, consisting of 2.1Mt/yr DRI, a 2.6Mt/yr capacity EAF, a 4.4Mt/yr capacity hot strip mill, 3.3Mt/yr capacity cold-rolling mills, 1.46Mt/yr capacity HDG lines and a 140kt/ yr capacity pre-painted line.

Finally, Ternium has highlighted that over the the years, the flat steel market in Mexico has gone from strength to strength.

Before the start-up of Pesquería, the manufacturing industrial sector in Mexico represented roughly 50% of apparent flat steel use. In 2022, this went up to 66%, a more than 15% point increase. The new investment packages in Pesquería bet on the fact that the growth will continue into the future. �

Mulling safeguard measures The share of Chinese steel in India’s steel imports has increased significantly to 32.7% in October 2023, compared to the 26.5% reported in the same month of the previous year. Overall, the share of Chinese, Vietnamese, and Nepalese steel increased in October ’23 compared to October ’22, while Korean, Japanese, Thai, Taiwanese, Indonesian, Belgian, and Russian steel imports declined.

To protect the interests of domestic producers, India is considering levying safeguard measures on steel imports, which take the form of a quota system (similar to the one imposed by the European Union), import restrictions, or duty levies. �

� 9. Latin America Update trade agreement. The rule came into effect in 2020. But in 2027, a more stringent requirement will commence requiring the purchased steel to specifically be ‘melted and poured’ in North America.

Besides import substitution and USMCA requirement motivations, Ternium also justified the DRI-EAF project by the optimistic demand projections associated with ‘nearshoring’ trends. Ternium highlighted that it is already seeing a significant increase in construction activity, especially for new factories in Northern Mexico. Even though the construction phase consumes more long steels, once these plants are built, the company will begin to sustainably consume flat steels, ultimately benefiting Ternium’s long term demand prospects. Moreover, Ternium explained that current nearshoring driven investments are more concentrated in small and medium-sized companies, while other major players’ investments (e.g., Kia and Tesla) will translate into relevant volume only in the coming years.

In June 2023, Ternium declared that it has chosen Pesquería for the DRI-EAF January/February 2024

India Update.indd 2

Fives wins Ternium contract In August 2023, Ternium announced that it had awarded plant supplier Fives a contract for a 600kt/yr HDG line. It will produce galvanised sheets up to 4.5mm thick and 1,854mm wide from cold- or hot-rolled base coils for construction and non-exposed automotive applications. It is important to stress that is a solo investment, differently from Tenigal, a partnership with Nippon Steel focused on sophisticated automotive uses.

In October 2023, Ternium contracted Tenova (also a subsidiary of the Techint group) to supply DRI-EAF equipment. The DRI module, based on the Energiron Direct Reduction technology jointly developed

by Tenova and Danieli, will directly charge

www.steeltimesint.com

22/01/2024 11:20:15

®

With over 50 years in the Steel Industry, we have a wide variety of solutions to keep your mill rolling.

Traversing Restbars allow for quick and accurate pass changes

· Honours existing mill attachment points and guide base, no machining on your stands required · Made from stainless steel and specifically tailored to your mill ensuring perfect fit, operation and longevity

Our roller entry guides keep your product on the pass · Single point, centralized adjustment during operation · 2, 3 and 4 roller configurations · Rigid, stainless steel construction · Broad size range

® spiral cooling system

Maximize your mill speed while meeting your quenching requirements on all bar sizes. Not just controlled cooling, but correct cooling

box configuration

· Fewer surface defects and better scale control · Available in Box, Trough and Restbar-mounted configurations

Contact Us www.fabris.com

info@fabris.com

905.643.4111

trough configuration

14

US STEELMAKING

Opportunities ahead Many opportunities lie ahead in the American steel industry, resulting from favourable legislation, a dynamic market, and continued efficiency gains. By Philip K. Bell* IN 2023, the American steel industry had a solid year. Demand for steel softened slightly in some sectors, including automotive, where a labour strike slowed production by three major automakers. But the market for steel remained strong thanks to favourable government legislation and a robust, resilient economy. There are reasons for cautious optimism that 2024 can be good for American steelmakers.

In 2024, key laws passed by Congress since 2021 should create an upturn in steel demand in the United States by making long overdue investments in America’s infrastructure, clean energy and supply chain security. The $1 trillion Infrastructure

Investment and Jobs Act, for instance, includes billions of dollars for new federal investment in America’s roads and bridges, water infrastructure, resilience, internet, and more. The $280 billion CHIPS and Science Act will fund construction of semiconductor manufacturing plants and other facilities.

And the $394 billion Inflation Reduction Act includes funding for a build-out of clean electricity generation and transmission. It’s worth noting that none of that funding constitutes a direct subsidy for steel.

Instead, these legislative achievements help fund steel-intensive sectors of our economy.

Sustainability will be the watchword for the American manufacturing sector in 2024

and beyond. Buyers of all kinds, including automakers, construction contractors and government procurement offices, demand cleaner materials for the products they make and the buildings they build. As makers of the cleanest steel in the world, members of the Steel Manufacturers Association already meet those customer requirements. Their electric arc furnaces produce, on average, just a quarter of the carbon emissions produced by mills that rely on extractive-based steelmaking processes.

The global transition to cleaner energy should drive demand for clean steel.

Massive wind turbines, power distribution equipment and other electrical grid

*President, Steel Manufacturers Association January/February 2024

SMA Bell.indd 1

www.steeltimesint.com

23/01/2024 11:27:13

US STEELMAKING

Philip K. Bell

components require a great deal of steel, and that goes beyond the components themselves. In the United States, projects to build offshore wind turbines, for instance, must start with construction of specialized 450-foot vessels that can carry power generators and blades from shore to the installation site. The ships, which are equipped with long stilts that reach the bottom of the ocean to stabilize them while workers install the turbines, represent just one steel-intensive element of the coming green construction boom.

Need for a single emissions standard How can steel buyers know which steel products have the lowest embodied carbon emissions? Stakeholders have begun coalescing around a common standard for green steel. The SMA has added its name to the list of signatories of the World Trade Organization’s Steel Standards Principles, www.steeltimesint.com

SMA Bell.indd 2

which were unveiled in December at COP28 in Dubai in the United Arab Emirates. The Steel Standards Principles, which were developed by standard setting organizations, steelmakers and industry associations, call for establishing common methods for measuring greenhouse gas emissions in iron and steel to make it easier to determine the carbon intensity of a given product. That could lead more companies to invest in low-emissions technology and smooth the way for global trade in clean steel products.

The Steel Climate Standard developed by the Global Steel Climate Council offers the fairest and easiest way to understand how steel products are classified by their carbon intensity. The SMA is a founding member of the Global Steel Climate Council (GSCC), which includes steelmakers, scrap recyclers and industry associations that represent the circular economy in nearly 80 countries. The GSCC developed the Steel Climate Standard with three objectives: • Provide a single, technology-agnostic framework for steel product certification and company science-based emissions target-setting that applies to all steel producers equally on a global basis.

• Allow all steel customers to know the carbon emissions associated with the steel products they are purchasing.

• Create an industry standard for achieving the emissions reduction goals in the Paris Climate Agreement by 2050.

We see it as crucially important to hold all steel to the same standard, regardless of how it is made. Schemes that have one standard for integrated mills and a tougher standard for scrap-based mills allow integrated steelmakers to call their steel green despite significantly higher emissions.

That misleads customers and slows our progress toward a low-carbon future. The Steel Climate Standard treats all steel alike, no matter how it is made.

The GSCC, which also endorses the Steel Standards Principles, released the Steel Climate Standard in 2023 after a lengthy public comment period that drew 170 distinct comments from industry stakeholders around the world. In December, the council published a technical guidance document that is currently out for public comment. Its final release is expected in the first half of 2024.

Agreement on a method for measuring the carbon intensity of steel manufacturing

15

represents a sticking point when it comes to international relations and the global steel trade. Increasingly, trade and sustainability questions are intertwined. The United States and the European Union, for instance, have been negotiating a so-called global arrangement on steel and aluminium since 2021. The heart of the matter is a mutual desire to reduce non-market steel excess capacity and increase trade in steel made with the lowest possible carbon emissions.

The question is how best to do that while honouring trade commitments with the rest of the world.

To aid negotiations, the US Trade Representative has asked the US International Trade Commission to undertake a factfinding investigation to determine the carbon emissions associated with the production of more than 50 categories of steel products. We had the honour in December of offering sworn testimony about the steel industry during a hearing of the USITC in Washington. We expect the investigation to reveal what we already know: SMA members make the cleanest steel in the world. SMA member companies Gerdau, Nucor and Steel Dynamics also hosted USITC representatives for tours of their facilities before the hearing. The United States International Trade Commission (USITC) report is due at the Office of the United States Trade Representative (USTR) in early 2025.

Ongoing investments in low-emissions steelmaking SMA members can expect to confront other ongoing trade challenges in 2024. They must contend with foreign competitors who use transshipment and other tricks to evade US trade restrictions. And they must compete in the global marketplace with steelmakers who benefit from government subsidies for steel production in places like China and India, and steelmakers who benefit from government subsidies specifically for transitioning from extractive coal-intensive steelmaking to scrapbased methods in places like Canada and Germany.

The playing field, in other words, is anything but level. By the end of 2025 SMA members will have invested, since 2021, over $18 billion of their own capital in new and upgraded facilities that are designed to improve their efficiency and environmental performance and expand higher valueadded production.

January/February 2024

23/01/2024 11:27:13

16

US STEELMAKING

The heart of their world-class environmental performance is their investment in the circular economy. They have demonstrated for decades that making steel out of ferrous scrap preserves our natural resources and open spaces while sharply reducing air pollution. Owing to technological advances, virtually every grade and quality of steel can be made in an EAF, apart from tinplate.

Scrap supply sufficient for the transition to a circular economy When debating the myth of scrap scarcity, we must first understand that many ferrous scrap estimates are static in nature and do not account for observed steel life cycles.

Many developed economies are net scrap exporters, and market behaviour supported by proper incentives will ultimately increase ferrous scrap collection.

Ferrous scrap is a globally traded commodity, and there is more than enough ferrous scrap available to support a shift away from extractive steelmaking processes to circular steelmaking methods. There is no justification to expand BF-BOF production.

eurotherm.com

SMATimes Bell.indd 3 Steel International_Watlow_ half A4_for print.indd 1

Policymakers and steel manufacturers around the world have reached the same conclusion, as they move to replace coalintensive furnaces with EAFs. A study published in 2023 by SMA and authored by two university professors demonstrated that the lifecycle of steel products is shorter than

experts have long assumed. That means that, on average, ferrous scrap becomes available sooner than anyone previously thought. Today, the United States exports 20Mt/yr of ferrous scrap. Elsewhere, China, India and other countries have immense scrap reservoirs waiting to be tapped.

SMA members are ready for 2024 SMA members stand poised to meet growing demand for sustainable steel, including a rise in demand generated by American investments in infrastructure and clean energy production. They have developed low-emissions steels that meet the rigorous requirements of challenging applications, such as offshore wind turbines. Some have added on-site renewable energy production to improve their emissions profiles, reduce demand on local power grids and cut long-term energy costs. They continue pursuing efficiency gains when it comes to raw materials. For instance, leading American EAF steelmakers found ways to sharply reduce requirements for pig iron in the aftermath of the full-scale Russian invasion of Ukraine in 2022. And SMA members make nearly continuous improvements in the processing of ferrous scrap.

SMA members are committed to taking a leadership role in modernizing the steel industry. Given the challenges that lie ahead of us, international co-operation – and fair competition – will be as important as ever.�

a Watlow brand

23/01/2024 08:06:22 11:27:50 01/11/2023

DECARBONIZATION

17

The author (right) with WWF-meerkat “Sur-Vival” (left) looking out for threats and opportunities on the horizon.

Photo: Pelle Berglund, Znapshot.

It is all about survival

It is easy to forget that climate change is only one of the threats experienced by countries, companies and individuals. All major risks must be addressed and relevant resources allocated in an optimal way by each and every one to secure survival. By Rutger Gyllenram* I guess it was in Disney’s The Lion King that many of us became acquainted with the meerkat Timon and this charming species.

Being a very social mammal, it lives in colonies which jointly look out for predators like eagles, lions and snakes, standing in a monumental pose. A hypothetical proposal by a chief meerkat saying: ‘today we only look out for snakes’, would probably be promptly rejected.

Taking part in Steel Times International’s conferences is always a pleasure and this autumn I had the honour to moderate a session as part of the Future Steel Forum conference in Vienna, with some interesting revelations. A speaker from one of the

many green initiatives asked the audience to approach the podium and join one of four groups. To the right were those who did not find decarbonization really important and to the left those who found it ultra important with two groups in between. I was appointed leader of the right group and was initially only accompanied by one person. I asked the delegate for the reason for the choice and got the reply: ‘my country is at war and we have other priorities’. Then the speaker asked the audience to think of their children or other young people and where they would have positioned themselves. Contradictory to what the speaker and I anticipated, the

main part of the audience started to move towards groups to the right and quite a few to my corner. Again, I asked “why?” and got the answer: “they have other problems that they worry about”. Regardless of the validity of this single observation I think that the decarbonization movement, of which I proudly am a part, must take a much wider view on climate change and not believe that decreasing greenhouse gas emissions can be singled out and treated as

*Founder and CEO, Kobolde & Partners www.steeltimesint.com

Rutger.indd 1

January/February 2024

22/01/2024 11:39:26

TAGS THAT Track assets from initial fabrication through end use without retagging. We offer a variety of ID tags for on-demand printing with our LabeLase® Metal Tag Laser Printers.

TAGS DESIGNED TO SURVIVE: Acid cleaning • Shot blasting • Painting Powder coating • Galvanizing

To learn more scan below:

LEARN MORE

Visit INFOSIGHT.COM WE BARCODE DIFFICULT STUFF® 20700 US Highway 23, Chillicothe, OH, 45601

DECARBONIZATION

Fig 1. Four processes with relatively high TRL using the reductants coal, natural gas, biomass and hydrogen from electrolysis. The use of fossil reductants requires efficient carbon capture and storage for the process to reach near zero status.

a separate problem embraced by everyone.

Furthermore, as a metallurgist, I must accept that the situation only to a minor extent can be solved with new processes, and that we should be open to new supply chains and perhaps investment logic. The overarching challenge is that we will not attract the necessary private funding unless we can manage market uncertainties and make investment offers for low emission steel projects with risks in parity with those for traditional iron and steelmaking.

In 2030 no one will talk about green steel Today it seems that many, or even most, companies have a plan for how to reduce the carbon footprint of their steel products by a certain amount until 2030 and have an ambition to be near zero by 2050. The first goal can be reached by increasing energy and material efficiency, electrification, using ‘green’ or ‘blue’ hydrogen, scrap instead of ore etc. Compared to what afterwards lies ahead, this step is easy, and acquiring some sort of green steel label requires limited effort thanks to the total confusion so generously provided to the market by an abundance of green initiatives. An example is that charging scrap on a blast furnace lowers the carbon footprint for the produced iron but since the amount of available scrap in the world is limited it does not affect global warming. Another problematic feature that we see today is the mass balance method according to which a certain emission reduction can be attributed to a fraction of the steel production that then can be marketed as having a near zero emission, at least for a period of time.

Do not get me wrong, I really think that companies should be rewarded www.steeltimesint.com

Rutger.indd 2

for whatever step they take to decrease emissions and a sales manager that cannot offer ‘green steel’ today will have to look out for a new job. However, if we are serious about the second step reaching near zero, we must not confuse incremental improvements with decarbonizing the entire production.

Today’s many disparate ‘green steel’ definitions may make the concept lose its meaning and cease to be used and instead the actual carbon footprint for a product will be calculated at production based on LCA standards and declared as one of many properties together with yield strength and hardness in Declarations of Performance, DoPs. Such measures do not create disadvantages for producers who make extensive investments and reach close to zero emissions and may take over.

Competitive low emission iron and steel will become the new normal Since the reduction of iron ore answers for the biggest part of the CO2 emissions from the steel industry the focus now is on

19

those processes, albeit not saying that the following steelmaking step does not matter.

Just like after the energy crisis in the 1970s, a large number of reduction processes are now proposed and probably like in the 1980s, very few will survive the pilot plant stage. However, those who can use existing infrastructure and engineering resources definitely have an advantage. Fig 1 At present, we can see four alternative reductants and process lines for large scale, near zero emission ironmaking as shown in Fig 1: 1. In the oxygen blast furnace with top gas recycling, CO2 with low nitrogen content which is suitable for liquefaction, transport, and storage can be captured.

Traditional blast furnaces are erected today in large numbers but may be altered at the end of the campaign life which could be 15-30 years. Lower coke consumption and increased productivity are arguments for using the oxygen variant and modifying existing plants.

2. Direct reduction using natural gas in either MIDREX or Energiron plants is the dominant way to produce Direct Reduced Iron, known as DRI, today. In order to capture 100% of the CO2 , heating and reforming should probably be done without burning top gas with air which might require some process redesign. As an alternative to natural gas a syngas from coal could be used.

3. Using biomass to produce a syngas for direct reduction offers the possibility to create a carbon sink when the biogenic CO2 is either stored or used as a raw material for chemicals.

4. Hydrogen produced with electrolysis of water offers a possibility to reduce iron without the use of coal and emission of CO2.

January/February 2024

22/01/2024 11:39:27

20

DECARBONIZATION

Availability of low gangue ore for DRpellets is sometimes said to be an obstacle for the transition to low emission steel.

One possibility is to introduce the smelter as an intermediate step to melt DRI to hot metal with low iron losses compared to the electric arc furnaces. The ore quality is probably not a show stopper.

Three factors will decide if these processes will be able to compete with traditionally produced steel and become the new normal for steel by 2050: I. Availability of technology and management to avoid methane leakage in coal, oil and gas extraction as well as available infrastructure, management and financing of CO2 storage for alternative 1 and 2.

II. Possibility to obtain economies of scale in engineering, construction and production of iron from iron ore for all alternatives.

III. Availability of private funding based on trust in proven technology and diverse supply chains.

Whereas fossil fuels are in abundant supply, electricity and biomass resources will probably make alternative 3 and 4 niche processes compared to 1 and 2, at least until 2050. If however, processes and reductants are chosen where they have the best possibility to become competitive, there is in my mind no reason not to January/February 2024

Rutger.indd 3

believe that low emission iron and steel will become the new normal and all processes find locations where they can excel. The key is probably to have an open mind and common business sense when deciding what to do and where.

Decarbonization will be put in perspective For countries, companies, and individuals, threats like security, political stability, economic growth, climate-change consequences and other issues are more integrated and complex than the eagles, lions, and snakes that the meerkat has to take on. Furthermore, there is another problem with the metaphor. Whereas the available countermeasures to threats used by animals probably have not changed much over the past millenniums, the technical, geoeconomic, and geopolitical landscapes change constantly and with that the available toolboxes for us humans.

Adapting to these changes and finding new ways to solve problems may prove to be a painful process. As an example: a natural reaction for countries to threats to the local industry is to provide subsidies for research, development and finally investment covering some of the CAPEX. However, support to invest in plants with an OPEX that cannot compete on an international market over time may make companies end up as loss-centres and major suppliers of

used equipment. It happened in Sweden in the 1980s. It can now happen again in many countries.

The next few years will offer new insights.

For example, we will have the first full scale hydrogen reduction plant at H2 Green Steel in operation. That is a brave project and experiences will be really important globally.

Other technologies that we can see rising to higher Technical Readiness Level, (TRL), will be the use of biomass as a source for reduction gas and smelters as a means to use high gangue DRI to feed BOF-converters with hot metal. But the real revolution would be the development of technology to avoid methane leakages from oil, gas and coal extraction together with making Carbon Capture and Storage, (CCS), an easy-to-use service to avoid CO2 emissions and finally to experience a new spring for nuclear energy, fission, and fusion.

Before we have results from all these projects in place, we must rely on rough estimates for OPEX to assess the competitive strength of the different production alternatives, and we will be less able to plan for an optimal use of limited resources like engineering capacity and capital.

And yet, we have to keep looking on the horizon, understanding where we are in the process of technical development, and figuring out how to best abate emissions of climate gases in a grand plan for survival. � www.steeltimesint.com

22/01/2024 11:39:47

HOT WORKING

21

A new approach to metal flow Hot working makes a vital contribution to improving the properties of steel. However, to refine the process, engineers really want to know how the metal flows inside the workpiece. Computer simulations play an important role, but there is a need to find a practical method to verify them.

Researchers have now developed an elegant solution to this long-standing challenge. By Patrik Holm* IN addition to changing the shape of a steel workpiece, a hot working process such as forging improves its properties by breaking down its cast structure, closing porosity and redistributing segregated elements. The result is enhanced strength, fatigue life and impact resistance.

The method used to deform the steel workpiece is particularly important. An example of the relative differences that processes such as forging and rolling can have in terms of their impact on the bar are shown in Figs 1 and 2.

To achieve the optimum benefit, it is important to achieve the correct flow of the steel grain. This is where visualization is important.

Ring rolling visualization The initial focus for the practical visualization of material flow was on the production of rolled and forged rings used in demanding, heavy-duty applications such

as bearings.

The manufacture of a ring typically starts with an upsetting and piercing operation of the steel billet to create a pre-form in the shape of a donut. This pre-form is then rolled to a ring in a ring rolling mill.

To ensure that the final ring has the high level of quality required, it is important to both understand and be able to optimize the pre-forming process step and the final ring rolling. Finite element method (FEM) simulations are a useful tool for building a better understanding of this process.

In the study carried out by Ovako’s research and development team, an FEM simulation of the process steps of upsetting, piercing, and ring rolling was performed. It was then compared with a new approach to the industrial visualization of the same process.

Simulation setup The 3D model of the tools used in the

simulation were created with commercial CAD software. The simulation was carried out in the FORGE software, with the input parameters shown in Table 1. To visualize the material flow, a specific pattern with rods was created on the 3D modeled billet as shown in Fig 3.

The tool and billet setup in FORGE can be seen in Fig 4.

Practical visualization setup The practical flow visualization process starts by taking a series of workpieces, such as the 100Cr6 (Ovako grade 803) sample shown here as the starting point for ring rolling. A series of holes are drilled right through them from top to bottom (Fig 5).

The next step is to then insert closely-fitting rods made of a lower grade steel into these holes, in this case, C9D. The clear visual contrast between the two grades enables the rods to act as ‘markers’.

The samples are put through the various

*Research and development team, Ovako www.steeltimesint.com

Andrew Bartlett.indd 1

January/February 2024

22/01/2024 12:06:15

MIDA–QLP

QSP–DUE

Buy the Original

NIEL I M

G

E TA L

TRUE

DA

REEN

Italy, Germany, Sweden, Austria, France, The Netherlands, UK, Spain, Turkey, USA, Brazil, Thailand, India, China, Japan

Danieli Headquarters in Buttrio, Udine, Italy www.danieli.com

@danieligroup

MIDA–QLP and QSP–DUE are the winning Danieli direct-rolling technologies for the most competitive production of long and flat green-steel products.

They are the result of the research and continuous improvement profused over 20 years, along with multi-million dollars of investment.

Their unmatched performances have fueled their success worldwide, thanks to lower resource consumption and carbon emissions, unbeaten OpEx, and outstanding product quality.

So, top technology becomes copied technology, the shortest route for competitors that, abandoning their solutions, now try to imitate MIDA–QLP and QSP–DUE Equipment and layout may be copied, but experts know that details make the difference.

Automation and process solutions are not easy to copy, and this will be the experience of anyone trusting in those imitations.

The competitive advantage for our customers, obtained by field results, is the best defense for our technology – more than court rulings protecting our patents.

Danieli offers the best guarantees for speedy learning curves, steady performances, and now Digital Plants with no men on the floor. Buy the Original.

GIANPIETRO BENEDETTI CHAIRMAN OF THE BOARD OF DIRECTORS

24

HOT WORKING

Fig 1. Simulation of strain imposed on bar by forging (left) and rolling (right)

Fig 2. Simulation of strain across the cross-section shows the more intense effect of forging (left) on the internal parts of the bar

Fig 3. 3D model of billet with rods introduced before upsetting

hot-working process stages, with the process being halted after each stage so that they can be taken to the laboratory and sectioned. Through polishing and etching the sections, a clear distinction between the main body of the steel and the marker rods emerges. These patterns reveal how the metal has flowed.

Upsetting Fig 6 compares the behaviour of the inserted metal rods for the FORGE simulation and the practical trial. Similar behaviour between the simulation and industrial trial is observed.

Piercing Figs 7 and 8 compare the behaviour of the metal rods in the simulation and the practical industrial trial as the process moves to the piercing stage. Again, similar behaviour between the simulation and industrial trial is observed.

Ring rolling Fig 9 shows the sample after the final stage of ring rolling. Even this far into the process there is still a remarkable correlation in the flow pattern as visualized by the FORGE test and demonstrated by the practical industrial test.

January/February 2024

Andrew Bartlett.indd 2

Fig 4. From top to bottom, the upsetting, piercing and ring

Fig 5. The practical approach to flow visualization, billet

rolling setup in the FORGE software

with drilled holes (top) and metal rods inserted (bottom)

Input parameters

Values

Steel grade

100Cr6

Flow stress model

Hansel –Spittel with parameters from Forge

Temperature billet

1200°C

Friction during upsetting

Coulomb limited Tresca model 0.4 and 0.8

HTC air

10 W/m2K

HTC tool-work piece

2000 W/m2K

Tool speed

30 mm/s

Tool temperature

250°C

Table 1. Input parameters used for the Forge simulation

www.steeltimesint.com

22/01/2024 12:06:19

HOT WORKING

25

Fig 6. Sample after upsetting showing the material flow of the rods from the practical

Fig 7. Sample after pre-piercing showing the material flow of the rods from the practical

industrial trial (top row) and from the FORGE simulation (bottom row)

industrial trial (top row) and from the FORGE simulation (bottom row)

Fig 9. At the final ring rolling stage there is still a remarkable correlation between the flow pattern demonstrated by the practical industrial test (top row) and the FORGE simulation (bottom row)

Fig 8. Sample after piercing showing the material flow of the rods from the practical industrial trial (top row) and from the FORGE simulation (bottom row)

In Fig 10 we bring together the samples from the various process stages in a single image that provides a clear view of how the steel flows during ring rolling.

Fig 10. Results from the practical industrial test showing material flow

Seeing is believing This simple and effective approach offers exciting new possibilities to visualize how steel flows during hot-working. The next step for the Ovako R&D team is to expand its application from ring rolling to other processes such as forging, rolling and tube rolling.

While there are many external checks that can be made on the quality of a hotworked product, such as temperature, surface finish, and dimensional accuracy, they do not tell engineers what has happened inside it. This new approach makes it possible to gain a deeper understanding of how metal flows under hot working. It will play a vital role in refining our processes to deliver the highest quality products to customers. Furthermore, because this new visualization method shows such good correlation with FEM simulations, it provides greater confidence in using FEM for process optimization. � www.steeltimesint.com

Andrew Bartlett.indd 3

through the various stages of the ring rolling process

January/February 2024

22/01/2024 12:06:33

26

INTERVIEW

In the first of three ad-libbed interviews with senior executives from Primetals Technologies, Matthew Moggridge* talks to Jan Friedemann Plaul who heads up the company’s global iron and steelmaking business.

Steel – it’s all happening I come from a world of Michelin-starred restaurants, five-star hotels and cosy little chef-led pubs nestled in the rolling hills of the English countryside, a world where there was such a thing as a free lunch – and breakfast and dinner – and an existence that constantly required keeping a tally of how many units of alcohol were being consumed. Back in the day, sitting on an InterCity train heading north or south or west – or even east – I never envied my fellow passengers, sitting there in cheap, washable suits with their HewlettPackard PCs examining boring spreadsheets ahead of an equally boring meeting in Leeds or Manchester or some other provincial UK city. Not me! Armed with a large can or two of Stella Artois in the days when the alcohol-by-volume was a respectable 5.2% – and not the less exciting 4.8% of today – I enjoyed the journey, personal stereo plugged in, various BritPop tunes flowing through my earphones and into my head as the countryside flashed past me and

the train rocked its way to my destination while I munched lovingly on a Millionaire’s Shortbread. My idea of a meeting was incognito dining as a culinary competition judge or possibly an interview with a wellknown chef followed by lunch, there were many lush combinations. But guess what?

I’ve been away from the hospitality industry for over 10 years and I’m not missing it one bit. In fact, if you ask me whether I prefer to write about the steel industry or the restaurant, pub and club markets, I would opt for the former any day. Why? Because there is so much going on in the steel industry, it’s an international marketplace and currently it is 100% the most exciting business to be writing about…and let’s not forget that I still stay in the hotels and eat in the restaurants and I’ve joined the jet set, although I must play the whole thing down when I’m at home. “Sadly, I’ve got to fly to Houston next month,” I might say with my long-practiced look of doggy dejection.

But enough of me! The big question is

why is the steel industry so exciting? There are many reasons, not least of which is its current obsession with ‘decarbonization’, not to mention digitalization, and don’t get me started on Chinese over-production and tariffs and countervailing duties or how Sweden is leading the way in developing hydrogen steelmaking or how the North American industry is already green, considering that over 70% of its production comes out of an electric arc furnace (EAF).

The key is to find somebody who might share my enthusiasm for this great industry and who better than Jan Friedemann Plaul who heads up the iron and steelmaking business of Primetals Technologies, headquartered in the UK. One of the ‘big five’ global companies developing production and processing technologies for steelmakers, Primetals Technologies’ largest office is located in Linz, Austria.

Friedemann’s role embraces everything from the mine to the liquid steel as well as alternative processes to the BF-BOF route,

* Editor, Steel Times International January/February 2024

Primetals Read Layout.indd 1

www.steeltimesint.com

22/01/2024 11:41:50

INTERVIEW

like COREX and FINEX and direct reduction.

The Corex process involves all metallurgical work being carried out in two separate process reactors – the reduction shaft and the melter gasifier, explains the Primetals website. Coking and sintering plants are not required and that means that a lower cost coal to that used in a blast furnace can be employed, leading to ‘cost savings’ of up to 20%, the company claims. According to the website, “… plant emissions contain only insignificant amounts of NOx, SO2, dust, phenols, sulfides and ammonia, so emission values come in below the maximum values permitted by European standards.”

The Finex process involves fine iron ore directly charged at the top of a cascade of fluidized-bed reactors where it is heated and reduced to direct-reduced iron (DRI) by means of a reduction gas derived from the gasification of the coal in a melter gasifier.

The fines are processed into hot-compacted iron, transferred (hot) to a charging bin positioned over the melter gasifier and then charged into it prior to melting taking place. The product – liquid hot metal – is claimed to be equivalent in quality terms to the hot metal produced in the BF or Corex plant, says Primetals.

Leading steel industry trends Prior to taking on his current role in 2020, Jan Friedemann was responsible for ‘Through Process Optimization’ (TPO), which is a know-how-based solution developed to improve efficiency, stability and product quality across the entire steel production process, claims Primetals.

Digitalization and decarbonization are the two leading industry trends of the moment and they fit together nicely, says Friedemann, as steelmakers transition to CO2-free production. “I think they go hand-in-hand,” he said, explaining how the former provides the manufacturer with an overview of their processes which in turn enables them to pay closer attention to the quality of the products they are producing.

Steelmakers ask: will they be able to produce the same quality of product using an electric arc furnace as opposed to a traditional BF? And that, of course, is the million-dollar question. In the USA 70% of primary steel production is through the EAF whereas globally it’s the other way around: 71% of steel is still produced in the blast furnace, and that won’t be changing for a while as Chinese and Indian steelmakers are www.steeltimesint.com

Primetals Read Layout.indd 2

still investing heavily in new BFs. In fact, looking at projections for production routes up to 2050, research compiled by Primetals indicates plenty of variation with production from BOF ranging from between 64% and 9% and from BF-BOF from 64% and 0%. Scrap and DRI-based production from EAFs range from 84% to 36%, according to a Primetals research document. “We have made our own intensive evaluation and have looked at the different steel production routes, as for us it’s quite important to understand which technologies will be required in the future,” he said, referring to projected figures for the year 2050 which state that Scrap/EAF will account for 33% of crude steel production, DRI EAF

13%, DRI Smelter BOF 14% and BF/BOF 35%. The 5% attributed to ‘others’, said Friedemann, probably relates to rotary kilns in combination with induction furnaces, foundries and open-hearth furnaces; and while different scenarios have been analysed – with some suggesting only 9% of steelmaking will be by BF-BOF – the Primetals model falls somewhere in between. “We are analysing what has to happen to make these figures a reality and we have to consider the availability of scrap.” Scrap, he said, cannot simply be found somewhere, “It’s not that there’s a heap of it lying around somewhere,” he said. “Basically, today, all scrap is used,” he added, claiming that the scrap amount will increase by over 70% from ~730Mt in 2020 to over 1250Mt in 2050 considering a life span of produced steel of approximately 40 years and a recycling rate of 85%.

We moved on to discuss steelmaking

27

in the USA where, in the 1960s, the EAF was widely derided by traditional BF-based steelmakers as only being fit to make trash cans. How things have changed! In 2024, the increasingly sophisticated electric arc furnace is slowly moving towards being capable of producing exposed steel grades.

But what was Jan Friedemann’s view?

“In the USA, EAFs are dominated by long products,” he said, but increasingly flat steel falls under their remit. “I think a major part of flat steel production can rely upon the EAF, but not all,” he insisted, claiming that automotive parts can be produced via the electric route’ and only a small amount of high-quality steels (e.g. exposed automotive parts) require the BOF route.

The knives are out for the blast furnace, but even Philip Bell, president of the USbased Steel Manufacturers Association (SMA) – the trade body representing the electric steelmaking industry – has told me there will always be a place for the traditional blast furnace.

“There are different views on how steel production will develop,” said Jan Friedemann, referencing Primetals’ own research which shows that projections vary widely with annual crude steel production between 1.5 billion tonnes and 3 billion tonnes by 2050. “For sure we have a scenario where China will reduce its production, but we have other countries like India and Africa and there’s a big question mark over what might happen in Africa,” he said, referencing Algeria as a very favourable place for producing so-called ‘green steel’ bearing in mind the availability of cheap natural gas and lowcost but good quality iron ore nearby.

Steelmaking in Africa There’s not a great deal said about steelmaking in Africa when, perhaps, there should be. Jan Friedemann believes it is ‘slowly picking up’ and has the potential to be a very strong market. “You can already see it,” he says, referring to Algeria where there has been a lot of investment in the past, ‘mainly due to the availability of natural gas’. He name-checked the Turkish steelmaker Tosyali, the biggest pipe provider for the North African countries, but also the driving force behind the world’s largest and first 2.5Mt/yr DRI facility, which is in Algeria. The DRI facility was completed in 2018 along with a pellet plant and a steel production unit producing steel from scrap metal and iron ore. A second DR plant is January/February 2024

22/01/2024 11:41:59

28

INTERVIEW

currently under construction. Friedemann also mentioned Algerian Qatari Steel (AQS) which, he says, has built a big DR plant in Algeria.

Midrex, whose mission is ‘creating the sustainable future of iron and steel’ through its unique Direct Reduction process, describes Algeria as the ‘gateway to Mediterranean Europe and the MENA region’, and the rising star in DRI production thanks to political stability and the availability of natural gas and electricity as well as governmental policies that favour the industrial sector.

Africa – ideal for steelmaking?

For Jan Friedemann, therefore, the African continent is ideally placed for steel production. He says that Algeria, while still importing iron ore, also has its own deposits, but unfortunately, they have a high phosphorus content. There are, however, other mines in Africa, in Mauritania, for instance, which are regarded as good facilities despite their remote locations and the country’s problematic infrastructure situation.

The elephant in the room for Africa, however, is the overall political situation which makes investors a little twitchy. Add infrastructure and power issues and perhaps you can see why we don’t hear a great deal from this promising continent in relation to steel manufacturing, although perhaps the situation will change somewhat as the decarbonization of the steelmaking process progresses and the growing importance of clean energy and clean power gain greater significance. Are things already improving?

That depends on the countries involved, says Jan Friedemann. “Algeria is developing very well, and I think there are a lot of ideas in Mauritania where there are favourable conditions, for example, for cheap wind energy combined with the availability of iron ore to produce green DRI,” he said, adding that Primetals is looking very closely at the African continent and plans to expand its networks there, especially where Direct Reduction technology is concerned.

The company has partnered with Midrex for more than 40 years. “We have built a lot of plants including all the DR plants in Libya.

We moved on to China, but not for very long. “China is still the biggest steel producing country but we expect a significant decline in production over the next decades. India is a growing market for sure and we see a lot of activities in January/February 2024

Primetals Read Layout.indd 3

the Middle East where conditions are favourable because of cheap natural gas and renewable energy. We are aware of a lot of projects in the region from companies wanting to produce green metallics there and then ship it to their home countries,” he said, adding that the region is wellpositioned geopolitically and logistically.

We moved on to discuss South East Asia and while Jan Friedemann said it was an increasingly important area for steel, Vietnam was still strongly pursuing the blast furnace route going forward.

Likewise, in India, capacity expansion

eliminating the blast furnace and replacing it with alternative methods of production based around electric steelmaking, scrap and green DRI. “But these other technologies have limitations in terms of ‘where do I get natural gas from?’ Where do I source my iron ore? And this may be the biggest problem: the availability of the right ores. Developing new iron ore mines takes decades and the iron ore supply now is mainly suitable for blast furnaces. Low quality sinter feed is coming mainly from Australia, but also Brazil, and changing the supplier route won’t be easy,” he said,

bypasses alternative production routes and remains focused on BF-BOF steel production – similarly the Philippines, Malaysia and Indonesia, although there is growth via the direct reduction route and EAF steelmaking.

adding that it is likely to remain the same for the next 10-15 years. But the logistical map will change and, says Friedemann, the places where energy is cheap will become hubs for green steelmaking and green metallic production. But will industrialised nations want to be dependent upon other countries for their steel or will they prefer to maintain their own indigenous industries?

It’s a question that goes to the very heart of what it means to be a sovereign state with a national airline, a central bank…and a respectable steel industry. “It’s a strategic asset, I would say, for countries to have their own steel industry,” Friedemann said.

“At least for building and construction, but for special steelmaking it becomes even more important.”

And then there is the question of standards and whether, in the brave new world of hydrogen steelmaking, there

Minimills In Latin America, Friedemann described the Brazilian market as ‘flat calm for a certain time’. “But now I think the activity is coming back, and also in Mexico,” he said, describing the US market as ‘very dynamic’.

The US is predominantly a minimill environment, but there are a growing number of so-called micromills serving local markets. “Micromills will always be a niche for us,” Friedemann said, “and for all OEMs.” According to Friedemann, micromills will be there in the future, but they won’t dominate anything.

We swung back to the question of

www.steeltimesint.com

22/01/2024 11:42:13

INTERVIEW

will be degrees of ‘greenness’ or a gold standard. “The good thing is that our technologies are hydrogen-ready,” he said. “The direct reduction plants can take hydrogen, and the burners we’re using in the different processes can be converted to hydrogen. The question is how we transition because it is very unlikely that tomorrow we will have a huge amount of hydrogen for it to be economically feasible.”

The steel industry, remember, is not the only one in the process of transition.

“Maybe there is a gold standard, but somebody must pay for it and the question

is what kind of premium is there on 100% zero emissions steel? To make it feasible, you need a certain premium. Will there be a market for this in future? Will it be a limited market?” Friedemann says it will be limited and that a time will come when that premium goes down.

“In terms of savings, CO2 steel is very interesting because you can reduce a lot of CO2 by only modifying one plant. But will the lion’s share of hydrogen go to steel or are there more ‘sacred’ industries in need?

Strong DNA Where decarbonization is concerned, Friedemann said that Primetals Technologies has strong DNA not only in traditional iron and steelmaking, but in the development of other technologies. “At one point in time there was the idea that coking coal would not be there anymore, but then www.steeltimesint.com

Primetals Read Layout.indd 4

the COREX development happened and then the COREX plant needed pellets so together with POSCO we developed the FINEX process because they want to use the cheaper fine iron ore out of Australia. We are very strong in the field of developing alternative processes to the blast furnace.

I would say that the best thing was always that the COREX and FINEX processes had to compete with blast furnaces and that the BF was so competitive in terms of efficiency and upscalability… it’s very difficult to beat them on economics.”

New rivalries In the future, argues Friedemann, the blast furnace won’t be the main competition in terms of today’s conventional rivalries like BFs versus COREX or FINEX, it will, if you like, have lost its edge and alternative processes like Midrex in combination with an EAF will become more important. “And besides this we are developing very new technologies, like HYFOR, which is based on pure hydrogen reduction, taking iron ore directly and in combination with an electric smelting furnace, producing hot metal that can be fed to BOF converters because many steel producers, for example, thyssenkrupp, want to use their existing BOFs to ensure they can continue to produce high quality steels. This new direct reduction technology is one of our main focuses,” he said.

HYFOR stands for ‘hydrogen-based fineore reduction’ and it was developed by Primetals Technologies and commissioned at voestalpine’s Donawitz site in Austria where initial tests were a success.

According to Primetals, the HYFOR pilot plant employs the world’s first direct reduction process for iron ore fines concentrates from ore beneficiation and doesn’t require any agglomeration like sintering or pelletizing. It is the only process in the world capable of processing iron ore concentrate fines with 100% particle sizes smaller than 0.15mm and a wide variety of ores (such as hematite and magnetite) supplied by different customers of Primetals Technologies. The modular nature of the DR plant allows for tailor-made scaling for all steel plants.

The Midrex process is now the dominant ‘alternative’ technology in the world of steel; it is very mature and has undergone several new upgrades in terms of scaleup, efficiency and energy recovery in recent years, according to Jan Friedemann.

“Because there are now many operators

29

of this technology, there are also a lot of innovations happening,” he said. “When a technology becomes mature and accepted by the market then the steel industry likes to develop it further; this is now happening with Midrex technology.”

There is, however, a problem for shaftbased technologies like Midrex and that is the availability of iron ore. “These kinds of technologies need a certain type of pellet or lump ore and that’s where limitations arise,” said Friedemann. Shaft-based technologies are capable of utilising some 30% of the available iron ore in the form of pellets or lump ore whereas the remaining 70% are sinter fines, which are not suitable for shaft-based technologies. “So if the blast furnace’s days are numbered, then new processes that can use sinter fines are needed,” he said, adding that in Asian countries and in China, steelmakers are heavily reliant upon these iron ore resources.

So, will new standards be drawn up to deal with differing grades (or levels) of greenness? “I think you said it correct,” said Friedemann, remembering a conversation he had with some employees of a large Asian steel producer who were saying ‘not green steel, but greener steel’.

And while zero carbon steel is possible and will happen, we won’t have a completely zero carbon situation. “There might be some production facilities that will only be based on hydrogen and electric energy, but there will be a lot in between,” he said. And while the automotive sector will benefit from zero emissions steel, there are going to be other industrial sectors where it won’t be as important, such as the construction industry and good old rebar.

“There is now a very clear commitment to transition the industry from all countries,” said Friedemann. “If you look at the major steel companies, they all have a very clear strategy. I think the dynamic is totally different than 20-25 years ago.”

Something that shouldn’t be overlooked is the amount of ironmaking units in operation, in places like China and India – and lots of them, says Friedemann, are brand new. The blast furnace is a huge investment. “You can’t just turn them off and this is one reason why we can’t go too fast,” said Friedemann, bearing in mind that the average life cycle of a BF is 15-20 years.

“So if you look from now until 2050, nobody will turn off a blast furnace without it running it’s life cycle.” � January/February 2024

22/01/2024 11:42:13

30

AUTOMOTIVE

Bumps in the road WHILE improving, North American light vehicle production remains below its pre-Covid-19 pandemic peak with some industry observers uncertain of when – if ever – output of over 17 million autos will be achieved, especially with the slower than hoped transition to electrified vehicles.

Steel remains the material of choice for both traditional internal combustion engine (ICE) vehicles and electric vehicles (EVs) despite the continued push to lighten the weight of vehicles to achieve greater fuel efficiency and lower carbon emissions and, when it comes to EVs, increased range.

According to Ryan McKinley, CRU’s senior steel sheet and plate analyst, the auto industry accounts for about 25% of total US steel sheet demand.

The types of steel being used by automakers and their parts suppliers, however, has been changing– with greater demand for advanced high strength steels (AHSS) versus mild steels. There is also an increased need for electrical steel, especially for EVs and hybrids.

“Market forecasts for North American light vehicles have been mixed ever since the Covid-19 pandemic,” Chris Kristock, vice president of the American Iron and Steel Institute’s (AISI’s) Automotive Program, said. He noted that while both light vehicle sales and production have been rebounding from where they had been at the depth of the pandemic in 2020, they remain well below 2019 levels.

Nevertheless Phil Gibbs, a steel and mining equity research analyst for KeyBanc Capital Markets said that 2023 was the

first year out of the past three that the expected automotive demand was actually achieved. He said that while a big increase in auto production had been forecast for 2021 and 2022, the actual increase was less than expected, largely due to certain supply chain issues, including limited availability of semiconductor chips.

However, according to Bill Rinna, director of Americas vehicle forecasts for Global Data (formerly LMC Automotive), given that there were fewer disruptions other than the United Autoworkers (UAW) strike, North American light vehicle production was expected to increase 9% year-on-year to 15.6 million vehicles in 2023. This would be a substantial increase from the 2022 total of 14.2 million vehicles and the 12.9 million vehicles from the year before that. “We aren’t only seeing stronger production, but also a more resilient sales environment,” he said.

KV Prasad, senior vice president of research and chief innovation officer for the Centre for Automotive Research (CAR), said that US light vehicle sales were expected to increase about 12.8% in 2023, including a 13.6% increase in light trucks and a 9.8% increase in passenger cars.

“A year ago we thought that North American auto sales and production would be about 2% lower in 2023 than how it ended up,” Edwin Pope, a materials analyst for S&P Global Mobility, said.

Though there are many headwinds in the auto market today, including the high interest rates (therefore financing charges), inflation and the potential for an economic

North American light vehicle production has yet to recover from the turbulence caused by the pandemic, but incentives driven by recent legislation, as well as strong pan-industrial partnerships, are keeping the market strong.

By Myra Pinkham* recession – all of which are likely holding back some potential vehicle buyers – Charlie Chesbrough, Cox Automotive’s chief economist, said that there are still enough individuals and businesses with enough need and ability to buy vehicles to sustain the sales recovery, especially given the average age of vehicles on the road.

In fact, Chesbrough said that the anticipated 10% year-on-year new light vehicle sales increase would be the largest increase since 2019, which, Philip Bell, president of the Steel Manufacturers Association (SMA) noted, is important to the overall US economy given that the auto industry accounts for about 20% of US GDP. Rinna said this increase in auto sales has been helped by the roundabout 40% year-over-year improvement in auto dealer inventories now that supply chain issues have been easing and auto production has been picking up. He also observed that the impact from the UAW’s strike against the US Big Three automakers was limited given the length of the strike – only six weeks – and that it had just targeted certain production plants, therefore certain vehicle models.

While the US automotive industry is currently in solid shape, which is also good news for its steel and other materials suppliers, Bell pointed out it is going through certain transitions that could have an impact upon both general vehicle demand and that of its raw materials and components. Bell said that in addition to people keeping their vehicles longer, the

*North America correspondent, Steel Times International January/February 2024

Myra.indd 1

www.steeltimesint.com

22/01/2024 12:09:10

AUTOMOTIVE

growth in rideshare services has resulted in a decrease in overall vehicle ownership.

At the same time, there is a transition to more EVs, increased use of autonomous driving technology, and government policies promoting such things as EVs, lower emissions, safety and increases in fuel efficiency.

Meanwhile certain other trends, such as the growth in the light truck share of the North American vehicle mix, are continuing, albeit incrementally, given consumers’ desire for larger vehicles. Abey Abraham, principal at Ducker Carlisle’s automotive and materials practice, said that in 2023 light trucks accounted for about 81% of the autos produced in North America and that, especially with the introduction of new light truck EV models, that share could increase to about 83% by 2030. Rinna said that this represents quite a shift from 2015 when light trucks only accounted for about 51% of the North American auto market.

While there has clearly been a push for electrification, to date, the adoption curve in the US hasn’t been as strong as in some other places, like Europe.

It also hasn’t been uniform region by region, Stephanie Valdez-Streaty, director of Cox Automotive’s industry insight, pointed out, with greater adoption on the West Coast and in a couple of pockets on the East Coast. A lot depends on specific states’ incentives, charging infrastructure, emissions regulations and dealer readiness.

While it is believed that US EV sales increased about 50% in 2023, that was from a very low base. And even with that sales increase, Pope said there were only about 1.2 million battery electric vehicles (BEVs), 1.4 million full hybrids and 1 million mild hybrids produced in North www.steeltimesint.com

Myra.indd 2

America, meaning that traditional internal combustion engine (ICE) vehicles had a 76.5% share of auto output.

That, he said, is because the historical EV hurdles, including range, availability of charging infrastructure and vehicle prices haven’t been overcome quite yet even with the incentives included in certain recently passed legislation, such as the Inflation Reduction Act (IRA). However, he said he believes that by 2028 the ICE share of the light vehicle mix could drop to 38%, although the biggest jump in electrified vehicles, at least in the near term, could be for hybrids.

There continues to be some factors that could limit that growth. CRU’s McKinley pointed out that due to concerns about the rate of US consumers’ buying interest, General Motors has recently delayed the launch of some new BEVs. Due to similar concerns, Ford recently announced that it will be producing 40% fewer batteries than it originally planned at its new Michigan battery plant that is slated to come online in 2026. There have also been some questions about what EV batteries will qualify for IRA incentives given the upcoming ban on Chinese battery materials.

“With autos getting bigger and heavier, there is continued need to compensate for that weight,” CAR’s Prasad said, noting that not only does vehicle weight – including the weight of their batteries – affect the range of EVs, but fuel efficiency goes down and carbon emissions are increased when ICE vehicles are heavier.

The big question for automakers is what materials they want to use to achieve their goals – steel, or aluminium and other lighter weight materials. While it varies by

31

vehicle, SMA’s Bell noted that currently steel accounts for about 54% of average North American light vehicles with most of the remainder being aluminium, composites, plastics and glass.

He said that five or six years ago, when Ford introduced its aluminium-bodied F150 pickup truck, while everyone was excited about aluminium making big inroads, steel use for both exposed applications and other components has since stabilized. He maintained that since aluminium doesn’t have the same tensile strength as steel, it is largely used for exposed body parts including closures.

“For traditional vehicle production, steel remains the material of choice due to its proven record of adapting new steel grades to enable lightweight vehicle designs, leveraging advanced and ultrahigh-strength steel grades for meeting the objectives of fuel economy and manufacturing cost efficiency,” AISI’s Kristock declared.

He maintained that the design of the body structure for EVs, with significantly increased mass due to their batteries, also favours steel because of new requirements for battery module protection and in meeting continued strengthening of mandated passenger compartment safety requirements associated with the heavier BEVs. CRU’s McKinley said that one big advantage steel has is its price – given that aluminium is much more expensive than even the most advanced automotive grade steels, which, in turn, carry a premium over commercial grade steels because of their limited residuals.

Also, Prasad pointed out that the production and processing of aluminium January/February 2024

22/01/2024 12:09:11

32

AUTOMOTIVE

isn’t necessarily as green as that for steel.

Kristock agreed, declaring that on a pound-for-pound basis, steel has the lowest greenhouse gas emissions intensity of all competing automotive materials with the American industry being a world leader in low emission steelmaking.

There has, however, been some transition in the type of steels used by automakers.

“Mild steel is the material that is under the most scrutiny,” S&P Global’s Pope said. He expects mild steel use in the auto sector to see an average annual decline of about 7% through 2030 at the same time as he expects AHSS to grow about 4%, ultra-high strength steel to grow about 5.3%, Third Generation AHSS to grow about 6.7% and aluminium to grow about 5.6% annually.

This comes as steelmakers are continually changing the chemistries of their steels, Gibbs said, stating that while he believes that US integrated mills continue to be in the best position to meet the auto industry’s requirements, several mini-mills have already made some inroads and, given some of their recent investments, will likely continue to do so.

In fact, during his company’s third

quarter earning conference call, president and chief executive officer of Nucor, Leon Topalian, said that the steelmaker continues to invent itself as a preferred supplier to the auto industry, as is evidenced by the fact that it has won General Motors’ supplier of the year award for the past four years.

Also, SMA’s Bell pointed out that it is partially through its Big River Steel subsidiary, and its ‘Best of Both’ market philosophy that US Steel will continue to grow its auto business, both for AHSS and now for electrical steel as well – which is currently in very tight supply domestically and likely to get tighter given the demand for EVs. McKinley pointed out that until recently, Cleveland-Cliffs had been the only US producer with the ability to make electrical steel. He said that even with Big River ramping up its non-grain oriented electrical steel (NOES) production line, the market is in a big structural deficit and will continue to be so until more investments in electrical

steel – particularly non-grain oriented electrical steel – are announced.

“Overall, 2023 was a solid year for the North American auto industry and the quick settlement of the UAW strike and the incentives in recent legislation bodes well for the industry going forward,” Bell said, noting that while auto output might not get back its ‘heyday’, it is still at a healthy volume.

And, while it will be dictated by the way that economic winds blow over the next couple of years, KeyBanc’s Gibbs said he is confident that demand will stay reasonably resilient. He said he also believes that steelmakers will continue to make the investments needed to meet the requirements of the automakers and their parts suppliers.

“The auto and steel industries will continue to work in partnership to address the change in the type of light vehicles being designed and built for future sales, including the move to more BEVs,” AISI’s Kristock said. “And the steel industry is ready to fully support this transition, including through the use of the newest Third Generation AHSS steel grades.” �

CONNECTING THE

INTERNATIONAL STEEL INDUSTRY Magazine

Website

Steel Times International is the key publication for the steel market, reporting on iron and steel making issues from all corners of the globe.

Packed with information and continually updated with news for steel professionals, www.steeltimesint.com also features special articles and interviews with leading industry figures.

Directory The Steel Times International Directory is the essential guide to steel manufacturers, producers, suppliers of plant equipment and services to the steel industry. Order your print or digital copy priced from £105 or FREE for paid subscribers.

Since 1866

Newsletter A round-up of the top news stories is sent to more than 7,000 industry professionals each week. You can register online to receive the weekly newsletter and keep up-to-date with the latest news from across the steel manufacturing industry. www.steeltimesint.com/e-newsletter

Online Events Steel Times hosts regular webinars and virtual events. Head to www.steeltimesint.com to see what’s coming up.

PUBLISHED BY BUSINESS MEDIA LTD

FIND OUT MORE AT STEELTIMESINT.COM

January/February 2024 STI-June23-PortfolioAd-HalfPage-185x128mm.indd 1

Myra.indd 3

Join the Steel Times International Group

@SteelTimesInt

www.steeltimesint.com 10/07/2023 14:07

22/01/2024 12:09:14

ARTIFICIAL INTELLIGENCE

33

Optimizing hybrid steel plants Reduce CO2 emissions, cut energy consumption, develop a new energy procurement strategy: the steel industry is facing major challenges in both the production and processing of steel. At the same time, companies must optimize highly complex processes, establish new procedures and build up expertise. And they are under great pressure to act.

By Heinz-Josef Ponten* STEEL production accounts for 7-10% of global greenhouse gas emissions, which have catastrophic effects on the climate.

To reduce the amount of emissions, the demand for steel products with a higher CO2 footprint needs to be reduced.

Customers are increasingly demanding steel products with a reduced CO2 footprint.

The production of climate-friendly steel requires a comprehensive transformation process in which CO2-intensive production processes are replaced in the medium term.

At the same time, production processes need to be digitalized in order to plan and control steel production even better and combine it with the new processes. AIsupported melting schedule optimization combined with material and energy demand forecasts and intelligent energy procurement are crucial.

According to studies, companies that fail to take decarbonization measures are putting around 14% of their potential company value at risk: a percentage that no entrepreneur can afford. The industry has since embarked on the path to socalled green steel and is focusing primarily on converting steel production from the traditional blast furnace route to direct reduction – above all with hydrogen. The latter– the replacement of natural gas and coke energy with hydrogen–is a key factor

on the way to lower CO2 emissions.

short notice or sell it at a profit

Mastering complexity in hybrid operations It is clear that the necessary transformation process will take place in hybrid operations, with new production processes gradually replacing conventional ones. The industry will, therefore, be required to co-ordinate the use of new and existing systems over years or even decades. This will further increase the complexity of the already multilayered dependencies in steel production.

Companies must synchronize the different systems on the various routes in a targeted manner, optimize production, maintain quality standards, and at the same time strike a balance between cost efficiency and environmental aspects. Efficient planning and scheduling management is essential in order to master this complexity and achieve the aforementioned goals. There are three main levers for this: 1) Use software for melting schedule optimization in order to reduce energy consumption 2) Effective and precise forecasting of energy and material consumption 3) Intraday energy trading in order to provide the energy required for the production processes with pinpoint accuracy and to buy additional energy at

Production must follow energy management The background: hydrogen-based steel production requires significantly more electrical energy than the conventional production of steel. For example, operating an electric steel mill requires an additional 310 to 640 kWh/tonne, depending on the scrap and DRI mix, DRI temperature and specific slag mass. In addition, other industries will also have to replace fossil fuels with renewable energy, which will significantly increase demand and drive up prices. Energy efficiency is, therefore, a key factor for the economic viability and competitiveness of green steel production.

Finally companies must adapt to the volatility of wind and solar energy feed-in in this context. This means that consumption will have to follow availability in future, while fluctuations will have a direct impact on energy prices. In this context, companies are required to include forecasts of available energy and demand in their planning.

If they are able to produce flexibly at times of low market prices, they can save considerable costs. In addition to efficient production control, controlling energy management is also necessary.

*Product manager, PSI Metals, email: hjponten@psi.de www.steeltimesint.com

PSI.indd 1

January/February 2024

22/01/2024 11:45:07

34

ARTIFICIAL INTELLIGENCE

Fig 1. KPI driven optimization and display of results to the user

Heat scheduling with Online Heat Scheduler An important factor for a sustainable manufacturing process is melting schedule optimization, which meticulously clocks the steelworks and helps to avoid sequence interruptions, among other things.

Even the shortest downtimes lead to throughput problems and higher energy consumption due to higher tapping temperatures or additional heating. The PSImetals Online Heat Scheduler (OHS) optimizes heat schedules in the melt shop based on casting sequences received from the planning systems. Based on this information, OHS creates a work schedule for all planned heats, which consists of the required treatment and transport steps, their durations, and the assignment of required production facilities, and operating equipment where these treatments can be performed.

OHS automatically reacts to all changes and delays during production to always ensure the delivery of the heats of a sequence to the caster at the required time. The tool as shown in Fig 1 also calculates demand forecasts for resources like hot metal, DRI or electrical energy and aligns the schedules to availability of the resources. For instance, production can be scheduled and aligned based on the availability or price of green electricity.

Fig 1 Forecasting the demands of hot metal, scrap, DRI, and energy combined with its availability and the transport logistics in a hybrid steel plant will become important KPIs for scheduling and facilities dispatching. This green KPI approach to scheduling management in steel plant optimization saves production and material costs, including energy costs, and supports the future decarbonization goals of steel production.

January/February 2024

PSI.indd 2

Fig 2. Smart management of conflicting targets is more key now than ever

Energy and resource demand forecast In order to predict the energy demand of a steel plant accurately, the main energy consumption processes have to be identified. Forecasting is easy for processes with constant energy consumption.

However, for those with varying energy consumption, the energy required depends on the products and process parameters of the production lines. It requires a Production Execution System (PES) to record the energy consumption and the production messages regarding production orders. The Production Execution System (PES) individually records these consumptions and links them to products, processes and production orders.

Combining this data allows for obtaining the specific energy needed, per production step and line and to calculate specific energy demand forecasts for a certain time horizon based on the production schedule.

CO2 reduction goals to be achieved with green DRI technologies in hybrid steel plants are mainly based on the usage of renewable energy. This makes it even more interesting to combine scheduling and energy demand forecasting to align the production to availability and price and at the same time provide the forecasts to energy management systems or energy supplier. Every change in production and resulting schedule is kept up-to-date in the energy forecast and allows operators to flexibly adapt energy needs and its supply.

Industrial consumers usually purchase electrical energy based on a mix of longand medium-term contracts, considering their own energy generated by process gases. Day ahead and intraday energy trading plays a minor role. With the sustainable transformation of the steel industry, the processes will need even more electricity while producing less gases to drive power plants. This will lead to a change of the mix and short-term purchase to react better on volatility and availability of renewable energy, which will play a bigger role for steel producers.

Finally, the combination of optimized production scheduling, energy forecasting and automated energy trading in one system platform would provide steel producers with a new way to flexibly adapt production to renewable energy availability and price.

Smart management of conflicting targets with PSI Qualicision AI Just like upstream steel production, downstream production also faces challenges. In rolling and finishing, green KPIs play important roles. In addition to throughput, lean stocks, quality and due date performance, just to name a few, new KPIs addressing energy availability and volatility, energy usage and price, as well as CO2 emissions, will impact the planning and scheduling processes. Steel producers have to consider how to efficiently manage conflicting targets as displayed in Fig 2.

These conflicting targets can be managed using PSI Qualicision AI to achieve green KPIs. PSI Qualicision AI is designed to ensure and optimize the process quality by means of intelligent data collection, analysis and balance between goal and criteria conflicts. This decision support when using the OHS, involves three automatized www.steeltimesint.com

22/01/2024 11:45:22

ARTIFICIAL INTELLIGENCE

workflow steps structured to optimize process quality: i. Automatically analyze inputs/set up constraints and business goals ii. Run the solver, analyze and balance KPIs iii. Iterate, compare and release scenarios based on explainable KPI preference management Optimization of time reduces energy consumption and the carbon footprint.

Scenario management means that the operator can simulate different scenarios to solve a problem, e.g., by adding re-work steps, changing the sequence of heats or shortening treatment, transport or buffer times. This has a significant impact in reducing energy consumption and thus the carbon footprint. Scenarios can be compared to find the right solution.

In a green-KPI-driven melt shop, these green KPIs can be set in OHS to optimize the tapping temperature, reduce buffer times, avoid unnecessary heating or cooling through transparent time management, and prioritize heats and sequences. In this way, the hot connect rate can be increased, media consumption can be forecast, and the forecasts can be made available to energy management systems and energy suppliers.

35

with machine-learned KPI preference management play a crucial role.

PSI Qualicision AI-based OHS can be used to optimize decisions and schedule heats at the shopfloor. Plant managers have the flexibility to set their own green KPIs and manage conflicting parameters in hybrid steel plants that continuously become more and more complex to handle.

Implementing these digital solutions opens the opportunity to optimize the full potentials of a hybrid steel plant by reducing waste and energy consumption and meeting the Paris Agreement to lower greenhouse gas emissions. � green steel production has started and steel producers around the world have to prepare for the challenges that arise from this transformation.

One of the challenges associated with hybrid steel production is when part of the old production route is replaced by new, hydrogen-based routes. To be able to switch between old and new routes, it is important not only to watch the process and quality side of things, but monitor energy consumption. In this regard, software and artificial intelligence when applied effectively have huge transformation effects in managing energy consumption, material resources and scheduling heats at the melt shop.

Combining intelligent optimization

References: 1. METEC ESTAD 2023 2. stahl. - Das Magazin für die Stahlindustrie 04/2023 KI-gestütztes Produktions und Energiemanagement Dr. Rudolf Felix, PSI FLS Fuzzy Logik & Neuro Systeme GmbH, Dortmund Heinz-Josef Ponten, PSI Metals GmbH, Düsseldorf Peter Bachmann, PSI Energy-Markets, Hannover

Harnessing the benefits of hybrid steel plants with digital solutions Steel is a major polluter of the environment and one of the core pillars of today’s society. As such, steel production needs to undergo a transformation to minimize CO2 emissions. The transformation to www.steeltimesint.com

PSI.indd 3

22/01/2024 11:45:26

THE STORY CONTINUES: STO

HAVE SOMETHING TO SAY AND WANT TO CONTRIBUTE?

Are you passionate about the future of steelmaking and have something to say about it? Then join us as a speaker in Stockholm and share your insights. Contact Matthew Moggridge now on matthewmoggridge@quartzltd.com

SPONSOR OR EXHIBIT Do you want to showcase or promote your products and services to over 200+ international steel professionals? Discover what opportunities we currently have available by contacting Paul Rossage on paulrossage@quartzltd.com

Visit our website to discover more about the event www.FutureSteelForum.com

OCKHOLM, JUNE 2024 AN INVITATION TO VISIT OVAKO’S HOFORS STEEL MILL HIGH-TECH STEEL SOLUTIONS FOR A SUSTAINABLE FUTURE Ovako invites delegates from the 2024 Future Steel Forum to tour its hub at Hofors on Monday 17 June 2024 (ahead of the conference on 18/19 June in Stockholm) to see how the company is continuing its journey towards steel production without CO2 emissions. The highlight of the tour will be the world’s first fossil-free

hydrogen plant for heating steel before rolling.before rolling. @Future_Steel

EVENT SPONSORS:

Join our Future Steel Forum Group

To be the first to hear when registration opens for the Future Steel Forum event in Stockholm, please scan this QR code

Official Media Partner Since 1866

Organised by BUSINESS EVENTS LTD

38

DECARBONIZATION

Net-zero steel before tomorrow A lot has been written and spoken about CO2 emissions reduction targets for the iron and steel industry in 2030, 2050, and beyond. The task is daunting and will require radical changes in energy availability and infrastructure to achieve.

In the meantime, we certainly need to produce steel, and it needs to be done with steadily less CO2 emissions. Most industry experts agree that the reduction in specific emissions will be gradual as new technologies and green energy become available and cost effective. All agree that hydrogen-based DRI is the ironmaking route that will take us to net-zero CO2 steel production, either paired with an EAF or a smelting furnace fed by a combination of DRI and recycled steel scrap. However, even those steelmakers already operating or planning to switch to the DRI-EAF route are faced with the spectre of tight supplies of low-residual scrap, DRI-grade pellets, and limited and prohibitively costly sources of hydrogen (H2), not to mention the scarcity of ‘green’ electricity needed to produce truly net-zero steel.

Midrex, which has been an innovator of direct reduction solutions for more than 50 years, already offers process technology with more than 50% H2 in its reducing gas.

As green hydrogen becomes more readily available at competitive prices, MIDREX® plants can be transitioned to operate with higher percentages of H2, up to 100%. The technical risks associated with hydrogenbased direct reduction are far lower than any other iron-making technology.

MIDREX H2™: the future of ironmaking In regions where the power grid is predominantly non-fossil based, the ultimate method for reducing the steel industry’s CO2 footprint is the use of green hydrogen produced on-site from renewable energy to make DRI in a MIDREX Shaft Furnace utilizing 100% hydrogen for iron ore reduction – known as MIDREX H2™. A specially-designed electric heater replaces the reformer to bring the gas to the

required temperature. Paired with an EAF, CO2 emissions can be reduced by 80% or more compared to the BF/BOF steelmaking route. This technology is already available at commercial scale, and has been selected by H2 Green Steel to produce 2.1Mt/yr of HDRI and HBI in Boden, Sweden.

MIDREX reducing gas is 55% H2 In most places around the world, the electric grid is not sufficiently decarbonized to justify the production of hydrogen by electrolysis. Actually, the emissions associated with producing hydrogen (from power production) would exceed the CO2 emissions from natural gas reforming.

Existing plants utilizing MIDREX technology already operate with a typical H2/CO ratio of 1.5, which corresponds to approximately 55% H2 and 35% CO (carbon monoxide) at the reformer outlet (see Fig1).

Operation with high levels of hydrogen has been proven at the FMO plant in Venezuela, where the H2/CO ratio has varied from 3.3 to 3.8. In addition, there are six MIDREX Modules that use reducing gas made from coal and operate at H2/CO ratios from 0.37 to 0.56, proving that the process is capable of operating over a wide range of reducing gas composition at industrial scale. (Fig 1) Transitioning to H2 with MIDREX Flex Displacing natural gas with hydrogen can be considered an ‘evolutionary innovation.’

That’s why we decided to call it MIDREX Flex, highlighting the flexibility of the process in terms of raw materials (iron ore and energy).

An existing natural gas (NG)-based MIDREX plant can be transitioned to use up to 100% hydrogen as the reductant. No fundamental design changes are required for the reformer or shaft furnace. Midrex can apply a proven CO2 removal system to capture CO2 from the top gas fuel or the reformer flue gas. This provides the flexibility for the plant to respond to ever changing market needs and feedstock availability.

In the changing landscape of a green industrial transition, steel producers are increasingly plagued by challenges such as tight supplies of scrap, hydrogen storage, and the scarcity of green electricity.

Midrex, supplier of direct reduction solutions, has innovated hydrogen-based direct reduction technology, allowing steelmakers to harness all the advantages of decarbonized production, without its practical limitations. By Vincent Chevrier, PhD*

Let’s look at the key features of a MIDREX Flex plant (see Fig 2): Hydrogen ready – uses up to 100% H2 as the reductant. Midrex has solutions ready to accommodate the entire range of input gas compositions at new and existing facilities MIDREX reformer – ensures optimum reducing gas conditions throughout the entire range of the transition.

MIDREX shaft furnace – delivers consistent product quality throughout the transition. The influence of endothermic hydrogen reduction is mitigated by the reformer and uniform burden movement.

Carbon capture and storage – carbon capture and storage can be applied to several different process streams, from 50% to nearly 100%. Available for addition to existing faculties or new installations.

*General manager – technical sales and marketing, Midrex Technologies, Inc. January/February 2024

Midrex.indd 1

www.steeltimesint.com

22/01/2024 11:46:53

DECARBONIZATION

The operation of the plant over the full range of hydrogen has been carefully studied and modelled. The following three key operational targets during the transition to hydrogen were identified and are part of the design philosophy: 1.

Maintain full plant capacity across the entire transition range while minimizing the requirement for equipment modifications or the addition of new equipment to the plant.

2.

Maximize DRI product carbon at each point across the full transition range by maintaining transition zone NG flow as far into the hydrogen transition as possible.

3.

Optimize reducing gas quality to the shaft furnace by maximizing the hydrogen addition downstream of the reformer.

Fundamentally, displacing H2 and CO (from methane reforming) with H2 only www.steeltimesint.com

Midrex.indd 2

39

Fig 1. MIDREX Reformer cutaway and gas composition

affects the thermal requirements of the process, as reduction with CO is exothermic whereas reduction with H2 is endothermic.

Therefore, the required amount of thermal mass flow to support the higher

endothermic reduction load in the MIDREX shaft furnace is maintained across the entire transition range by increasing gas flow at the bustle.

In the early stages of the transition to January/February 2024

22/01/2024 11:46:55

DECARBONIZATION

41

What plant modifications are necessary?

For replacing NG beyond 30%, major plant areas will most likely require some modifications. For a new plant, these modifications are engineered at the onset, and can be made at a judicious time when green hydrogen is available in larger volumes. For existing plants, those modifications can be engineered by Midrex on a case-by-case basis.

Fig 2. Key features of MIDREX Flex

H2 injection point

NG replacement by H2 (%)

1.

Downstream of reformer

0-90%

2.

Burner fuel

75-100%

3.

Upsteam of reformer

85-100%

Table I. H2 injection point values

hydrogen, a small amount of hydrogen is injected downstream of the reformer without preheating (#1 in Fig 3).

Injecting hydrogen at this location allows optimization of reformer operation so it can be held as close to the standard operating conditions as possible during the transition while maximizing the reducing gas quality to the shaft furnace.

At ~75% H2 in the reducing gas, hydrogen is added to the reformer burners to maintain the DRI product carbon as far into NG replacement as possible and to continue to reduce the carbon footprint (#2 in Fig 3). Hydrogen injection is introduced upstream of the reformer between ~85-100% to maintain reducing gas quality and enhance energy efficiency in the process (#3 in Fig 3).

Table I presents the H2 injection points in the MIDREX Flex flowsheet and the percentage of NG replaced by hydrogen at each point.

There are several operational changes to be expected during the transition to hydrogen: • Reduction kinetics actually improve with higher amounts of H2 (at constant temperature), but the bed temperature will be affected by the endothermic reduction.

• CO2 emissions and the DRI product carbon will decrease as NG is replaced by hydrogen because both are derived from the consumption of natural gas. NG www.steeltimesint.com

Midrex.indd 3

injection in the lower part of the furnace provides some carbon in the product.

• H2/CO ratio will increase and the molecular weight of the process gas and reducing gas will decrease as hydrogen addition is increased due to the relatively lighter weight of the hydrogen.

• There will be an increased demand for cold water and a corresponding decrease in the demand for hot water.

Shaft furnace The shaft furnace requires no fundamental changes across the full range of hydrogen addition.

Increasing the hydrogen will increase the endothermic load in the furnace, which is an adiabatic reactor and requires more heat input to sustain the reduction process with higher amounts of H2. There are two methods for increasing the heat input: 1. Increase the sensible energy entering the reduction furnace by raising the reducing gas temperature.

2. Increase the total energy (or thermal mass) into the reduction furnace by raising the reducing gas flow per ton entering the bustle at any given temperature.

Raising the reducing gas temperature is the simplest method, but often the ore cannot be elevated to sufficient temperature to provide all the required additional reduction energy. The clustering tendency of the pellet typically dictates

Fig 3. MIDREX Flex flowsheet showing H2 injection points

January/February 2024

22/01/2024 11:46:57

42

DECARBONIZATION

Midrex and Paul Wurth were selected to engineer, supply, and construct a 2.5Mt/yr MIDREX Flex plant for thyssenkrupp Steel Europe AG at its Duisburg, Germany site. the highest limit. Acceptable top gas and bustle gas temperatures can be maintained by increasing the amount of reducing gas flow per ton entering the shaft furnace to provide the required energy for reduction.

Careful selection of refractory is also required at higher amounts of hydrogen.

Reformer No fundamental design changes are required for the reformer.

As the amount of hydrogen increases, the amount of reforming required decreases and the reaction heat decreases. As hydrogen replacement progresses to 100%, the reformer essentially becomes a heater to provide the necessary sensible heat to increase the temperature of the reducing gas.

The existing reformer catalyst is suitable throughout the transition. At 100% hydrogen operation, the existing catalyst can be substituted with an inert catalyst since there is no reforming and only sensible heat transfer is necessary.

The reformer burners are designed to operate on top gas fuel, which has a heating value similar to hydrogen.

The existing burners are suitable for the transition to hydrogen with only minor modifications.

Process gas compressors As NG is replaced with hydrogen, process gas flow will need to increase to supply more thermal mass flow to the furnace. The addition of a single additional compression stage will allow for operation across the full transition range.

January/February 2024

Midrex.indd 4

Heat recovery During the transition to hydrogen, the overall reformer heat load will decrease.

Therefore, flows of flue gas, combustion air, and top gas fuel will ultimately decrease. As the transition progresses to higher amounts of H2, an existing top gas fuel heat recovery bundle can be repurposed for preheating the hydrogen to allow for more hydrogen to be injected downstream.

Cooling gas compressor As the hydrogen transition progresses, NG is withdrawn from the cooling zone loop. As a result, the cooling gas composition reverts from a mixture of methane and nitrogen to a mixture of hydrogen and nitrogen. This change in the cooling gas composition will increase the cooling gas flow requirement.

The cooling gas compressor capacity is expected become limiting at approximately 70% NG replacement.

Process water system Increasing the level of hydrogen in the reducing gas will increase the amount of water vapour in the top gas. This translates to a higher condensation heat load in the top gas scrubber and requires increased water flow to the packing, which will create more water for the overall system to handle.

Cold process water demand will increase and hot process water demand will decrease since the controlled process gas temperature at the exit of the top gas scrubber decreases as H2 content increases.

Additional equipment such as a cooling tower cell, recirculation pumps, and supply pumps could be required. �

The plant will initially operate on reformed NG until sufficient H2 is available, at which time it will be transitioned to 100% hydrogen operation.

Start-up is planned for the end of 2026.

Carbon capture and use (CCU) CO2 removal is not necessary in a NG-based MIDREX Plant because the CO2 is recycled to the reformer and converted into CO. However, a CO2 removal system can be included if it is economically feasible (e.g., carbon tax credits) and if there is a means to store or utilize the CO2. Midrex has experience engineering CO2 removal systems for plants based on coal gasification (MxCol®) in areas where NG is difficult to obtain.

In the case of NG-to-H2 with Midrex Flex, there are two options to separate and capture CO2: 1.

Remove CO2 from the top gas fuel line, which is used in the reformer for heating.

2.

Remove CO2 from the flue gas of the reformer after heat recovery.

The CO2 emissions can be reduced by approximately 40% with top gas fuel capture (option 1) and approximately 85% with flue gas capture (option 2).

These figures can be higher depending on the carbon capture technology selected.

www.steeltimesint.com

22/01/2024 11:47:11

W E

C O N V E Y

Q U A L I T Y

Conveyors for Green Steel

HBI is here to stay!

For 50 years, Köppern briquetting machines have played a key role throughout the world in the production of HBI for DRI processes.

And HBI is still in demand, as demonstrated by the new HBI plants equipped with Köppern roller presses at LEBGOK (Russia), ArcelorMittal (USA), CLIFFS (USA) and upcoming installations, reducing the CO2 footprint of the steel industry.

• Hot abrasive and chemical reactive bulk material • Hot pellet transport

» State of the art technology » Experts in process technology » High plant availability » Long-lasting equipment

• HOT DRI charging

Köppern – Quality made in Germany.

www.koeppern.com

AUMUND Foerdertechnik GmbH metallurgy@aumund.de · www.aumund.com

44

DIRECT REDUCED IRON

How the ENERGIRON® process can solve climate challenges As of today, the iron and steel industry accounts for about 7% of global CO2 emissions, with about 90% of them coming from the coal-based steelmaking route. Most countries have already committed to climate neutrality by 2050, which will require worldwide efforts, specifically for the steelmaking industry where it will involve a dramatic shift from coal-based to gas/electrical-based production. This will be possible through the use of Direct Reduced Iron (DRI) using natural gas (NG) as a starting step, to be progressively replaced by green hydrogen (H2) as the primary energy source for ironmaking.

By Stefano Maggiolino1, Jorge Martínez2, Leonardo Tamez3, Pablo Duarte4 AS per 2022 steel production data and our estimates of CO2 emissions by the steelmaking route, from total crude steel production of 1.885 Mt, the integrated blast furnace-basic oxygen furnace (BFBOF) route represents about 71% of world steel production, contributing 90% of CO2 emissions of the steel sector, while the gas-based direct reduction plant-electric arc furnace (DRP-EAF) scheme with above 5% of steel production accounts for only ~3% CO2 emissions. Fig 1 Natural gas-based DRP facilities already contribute to a significant reduction of CO2 emissions. In general, just based on the use

Fig 1. Steel production and CO2 emissions by production route

(1) Tenova HYL, president & CEO (2) Tenova HYL, commercial director (3) Tenova HYL, after sales & marketing manager (4) Penguin Engineering, partner/consultant January/February 2024

Tenova.indd 1

www.steeltimesint.com

23/01/2024 12:28:59

DIRECT REDUCED IRON

of coal in the BF-BOF route as compared with NG in the case of the DRP-EAF route, by basic carbon material balance, the DRPEAF route emits 40% to 60% less CO2. This depends mainly on CCU/CCS capabilities and on plant location due to carbon intensity of electricity (kgCO2e/kWh), as compared to the BF-BOF route.

At the present time, and based on proven and available ironmaking technologies, the pathway to follow for achieving carbon neutral steelmaking is the production of DRI with green hydrogen.

While ENERGIRON® process (the DRI technology jointly developed by Tenova and Danieli), with NG, typically operates with H2/CO of 4 to 5 with up to ~70%H2 vol., recent cases such as HBZX DRP in the province of Hebei, China have proven that ENERGIRON® technology is already capable of managing, on an industrial scale, an even greater content of hydrogen in the process gas, which will further increase the emission-cut by more than 70%. Moreover, the HBIS Group has won the WSA Award for ‘Excellence in low-carbon production’ in 2023 thanks to a unique coke oven gas zero-reforming DRI process combined with EAF. The transition towards green steel production by means of hydrogen usage is inevitable today, considering the proven ironmaking technologies available. In this context, the ENERGIRON® DR technology has an inherently wide range of hydrogen usage from 0% (where only natural gas is fed as total energy) up to 100% (where only hydrogen is used for both process and fuel) with the possibility of operating the DR plant in a reversible and smooth mode. This has already been proven in demonstration campaigns at Ternium facilities and at Hybrit. Besides the fact that the process includes an inherent selective CO2 removal as part of the scheme, ready for CCU/CCS, the technology offers high flexibility for a seamless and cost-effective progressive transition from NG to H2 or direct and energy efficient (gas and power) use of H2 as full replacement of NG. Among the various projects in the pipeline, Salzgitter AG is leading the path of DRI production with hydrogen in Europe. Through its subsidiary, Salzgitter Flachstahl GmbH, the group has selected ENERGIRON® as technology supplier in its mission to reinvent the steelmaking process scheme. The SALCOS® initiative is currently demonstrating to the industry the www.steeltimesint.com

Tenova.indd 2

45

Fig 2. Salzgitter Flachstahl GmbH’s SALCOS initiative

most feasible approach towards BF-BOF route replacement with the DRP-EAF route.

The project is currently in an advanced phase of engineering. On the other hand, μDRAL plant, also in Salzgitter Flachstahl GmbH premises, is a demonstration pilotscale plant confirming the feasibility of ENERGIRON® technology for producing DRI with either natural gas or hydrogen. Fig 2 In terms of CCU/CCS, ENERGIRON® technology has always been characterized by a selective CO2 removal system as part of its core unique scheme. This CO2 removal technology has been proven in 14 DRP installations since 1980, decreasing the carbon footprint by more than 60%.

TATA Steel Netherlands in IJmuiden with its project HERACLESS constitutes part of the decarbonization plan of TATA Steel Europe with a H2-ready ENERGIRON® DRP

together with a steelwork facility. The project is currently in engineering phase and is a key path for TATA Steel Netherlands towards being CO2-neutral by 2045. Fig 3 Following the same path, Vulcan Green Steel, a newly established company that is part of the Jindal Steel Group, relied on ENERGIRON® for its new H2-ready direct reduction plant in Duqm, in the Al Wusta Governorate of the Sultanate of Oman.

Starting with natural gas as a reducing agent with the possibility of mixing it with up to 100% H2, according to H2 availability, the new ENERGIRON® DR plant will produce 2.5Mt/yr of HDRI to be charged to an EAF with a temperature of >600°C, allowing significant energy savings for the steelmaking process. The plant will also be able to produce low carbon footprint Hot Briquetted Iron (HBI) for storage or export

Fig 3. HERACLESS Project at TATA Ijmuiden in the Netherlands

January/February 2024

23/01/2024 12:29:02

46

DIRECT REDUCED IRON

Fig 4. Vulcan Green Steel in Duqm Oman

purposes. The ENERGIRON® technology has the capability to capture CO2 from the process and utilize it for other applications, which will further reduce overall plant emissions and, together with the EAF, bring the green steel hub closer to achieving carbon-neutrality. The completion of the DRI Plant at the Duqm site is scheduled for 2026. Fig 4 Steelmaking routes to follow Among the options for replacement of BF-BOF steelmaking, currently there are two main trends: • DRP-EAF • DRP-Melter (‘OSBF’) - BOF

Fig 5. The two main routes for replacement of BF/BOF integrated steel plants: DRP- EAF and DRP-Melter

DRI, as feedstock for EAF steel production, is based on the use of NG and/ or hydrogen as the primary energy source for reduction of iron oxides. This is the current available technological pathway for replacing the BF-BOF coal-based scheme for decarbonization. Since the amount and composition of the gangue in the iron oxide may have significant impact on the operation and economics of the EAF, high-grade iron ores are required for DRI production to optimize the operating cost and/or steel quality production. In this context, the net-zero pathway for the steel sector, based on gas-based DRI production and using green-H2 as a reducing/energy

agent, will trigger an increasing demand for higher volumes of high-grade iron ore pellets. In this respect there are various pelletizing projects under different stages of implementation worldwide to cope with forecast demand.

An alternate and transitional approach for decarbonizing the BF-BOF installations, consists of the replacement of the ironmaking BF system with a gas-based DR plant and electric melter (OSBF or open slag bath furnace) while keeping BOF downstream steelmaking facilities in operation. The scheme comprises the DR plant for HDRI production feeding an OSBF, for production of hot metal. DRI is produced using NG and H2, and low- grade iron ore pellets, which is fed to an OSBF to produce hot metal (as feeding material to existing BOFs), and granulated slag.

For this approach, meeting the needs of integrated steelmakers in decarbonizing the integrated mill, Tenova offers the highly energy efficient iBLUE® scheme including heat recovery from off-gases as fuel in the integrated DRP process gas heater.

The main advantage of this route is the possibility of processing low-grade pellets (blast furnace type) with the resulting amount of slag, which can be converted in the OSBF into a slag that is similar to blast furnace slag.

Therefore, the iBLUE® scheme is a valid alternative to the blast furnace, being able to utilize almost the same raw materials and produce the same type of outputs (hot metal and blast furnacetype slag) but requires higher CAPEX in greenfield installations (needing an oxygen steelmaking plant). Fig 5 DRP-EAF, a traditional and proven steelmaking route It is expected that most of the steel to be produced worldwide from DRI will be based on the DRP-EAF route, as a well-known and proven technology in regions such as North America and MENA. As referenced, there is the pioneering path historically followed by Tenova since the 1950s, and the recently announced Pesqueria plant for Ternium Mexico. This represents Ternium’s largest investment plan to date involving around $2.2 billion for a DRP with integrated material handling, an EAF equipped with Consteel® and Electromagnetic Stirrer Consteerrer®, two ladle furnaces (LF), and a Fume Treatment Plant for a guaranteed total

January/February 2024

Tenova.indd 3

www.steeltimesint.com

23/01/2024 12:29:05

WO

RLD

HIRON 90 HIRON 80 HIRON 75 HIRON 60

´S F

IRS

HIRON

T

H2

THE NEW GENERATION OF LINING MATERIAL FOR THE HYDROGEN DRIVEN DRI-PROCESSES

STEULER-KCH GmbH | 56427 Siershahn | GERMANY Phone: +49 2623 600-216 | E-Mail: info@steuler-kch.de www.steuler-linings.com

48

DIRECT REDUCED IRON

their visionary strategy towards green steel transition through DRP facilities. As of today, ArcelorMittal Dofasco in Canada, consisting of 2.5Mt/yr DRP for hot DRI production whose objective is to replace BF/BOF operation, is currently in the engineering phase. Additional clusters in Europe are expected to join the Canadian project in the short term, also with ENERGIRON® technology.

Fig 6. Ternium Pesqueria Project including a 2.1Mt/yr ENERGIRON DRI Plant

production of 2.6 Mt/yr of high-quality steel for the automotive sector. Fig 6 Increasing demand on green DRI and scrap DRI/HBI trade is expected to increase from 7% to a maximum of 30% by 2050.

As per the EU scenario, new EU-ETS regulations on CO2 emissions include; 1)- reducing emissions by 55% by 2030 and reaching climate neutrality by 2050, 2)- phasing out free allowances for

companies from 2026 until the end of 2033, 3)- additionally, tariffs on non-green steel imports will require production of green DRI domestically or green steel and/or green DRI/HBI imports, sourcing worldwide.

Similar targets are being followed by several countries worldwide.

As mentioned above, this demand shall be met by green steel produced from green DRI and scrap. Hence, companies like Arcelor Mittal have already placed

Which route to follow?

While selecting the steelmaking route to proceed with for decarbonization, the most important parameter is CO2 emissions.

Currently, direct CO2 emissions, as well as Scope 2 and 3 emissions, are related to several factors, including the local carbon intensity of electricity (kgCO2e/kWh), iron ore and consumables sources, etc. In this regard, the following analysis is based on the listed considerations: • The selected DR technology includes capabilities for efficient and inherent CO2 removal for CCU/CCS (ENERGIRON®), to prevent further emissions while capturing CO2 emissions.

• When applicable (other than a 100% H2 scheme), CO2emitted from flue gases has not been considered for CCU/CCS due to it being inefficient and more energy demanding (and, therefore, increasing CO2 emissions).

• H2 to process and fuel for 100% H2 schemes.

• Location of 0,38 kg CO2/kWh electricity intensity.

• For the DRP-Melter-BOF scheme, recovery of off-gases from the melter and used as fuel in DRP. • Including Scope 2 (power from external sources) and Scope 3 (oxygen, iron ore pellets and other consumables) [Emissions Factors WSA], as indicative burden.

• Production of Hot DRI with 94% Mtz and, 1)- for NG: 4,6%C for melter, 3,6%C for EAF and 2)- for 100% H2 use: 0% C. As referenced, the following indicates the scenario without any CCU/CCS in the DRP. Fig 7 On the other hand, by including inherent ENERGIRON® CCU/CCS capabilities, the results present a significantly different scenario. Fig 8

Fig 7. Expected CO2 emissions for different routes without CCU/CCS

January/February 2024

Tenova.indd 4

Based on the above-listed considerations, when comparing DRP-EAF with NG and www.steeltimesint.com

23/01/2024 12:29:08

DIRECT REDUCED IRON

Blue/Green H2, whenever there is the possibility of ENERGIRON® technology, with inherent selective CO2 elimination for CCU/CCS, the direct use of NG followed

by Green-H2 will be the efficient and economical approach versus Blue H2 in terms of CO2 emissions. It can be noted that for the ENERGIRON® iBLUE®-BOF scheme, with 90%-100%NG, there is a much-reduced need of coal addition to the melter since the DRI is already discharged with >4%C thus optimizing operating and reducing carbon footprint in addition to inherent CCU/CCS. Moreover, the presence of a reducing environment within the OSBF promotes the reduction of the remaining FeO in the DRI pellets, thus achieving higher iron yields.

The arc mode reduces to a minimum the Nitrogen pickup in the hot metal, making the metal compatible with typical integrated steel mill secondary metallurgy.

In any case, even with the use of green H2 for steelmaking in achieving 2050 net-zero emissions, there will be limited but certain coexistence between iron and carbon. In fact, this is the nature of the steel alloy. Sources of carbon will be related to minimum coal injection in the EAF, from carbonates (lime, dolo-lime), electrodes – as direct CO2 emissions – and oxygen, scrap, and electricity (depending on carbon intensity), as indirect emissions in connection to Scope 2 and 3 inputs, with the only possibility for neutral carbon being through CCU/CCS and minimizing carbon footprint respectively.

In addition to CO2 emissions, there are other important factors to be considered while selecting the route to follow when implementing ironmaking/steelmaking projects.

• Availability and forecast of the pricing of raw materials and energy for OPEX analysis (iron ore, scrap, NG, H2, electricity, etc.). Particularly, in the case of DRI grade premium pellets versus low grade pellets.

• The presence of existing BOF facilities versus greenfield installations (in greenfield typically the EAF route is preferred, while in brownfield integrated steel mills both EAF and OSBF routes could be viable).

• Local regulations.

• Steel quality to be produced, with particular focus on secondary metallurgy requirements and processes.

• Financial support to decarbonizing projects.

• Electrical network capabilities. www.steeltimesint.com

Tenova.indd 5

49

Fig 8. Expected CO2 emissions for different routes with CCU/CCS

• Slag disposal/off-taking and reverts from the steel mill.

• Availability for CCU/CCS solutions.

• Logistics constraints.

Alternatives Steelmakers need different alternatives for decarbonizing existing installations.

Selecting the adequate path requires a strategic evaluation of different solutions related to local regulations and conditions, raw materials and energy sourcing, and the quality of steel to be produced.

The availability of technologies to produce steel has evolved significantly in the last five years, some are at early stages of development while others are already mature, proven, and H2-ready for implementation in an efficient and costeffective manner.

Tenova believes that ironmaking/ steelmaking technology providers have an important role in opening flexible options for customers without taking a one-sizefits-all approach, as has been the case for most projects under different stages of operation and implementation.

Conclusions The decision on which technology to implement is critical and complex with a myriad of factors to take into consideration and this paper only surfaced a few. At this present time, Tenova sees the role of technology providers as more than just equipment and process providers, but rather as consultants who, with experience gained in several different projects in a variety of locations and setups, can examine the best solution for each single case. � January/February 2024

23/01/2024 12:29:30

50

PERSPECTIVES Q&A: DAIWA STEEL TUBE INDUSTRIES

Striking a balance Now is the time for consolidation and collaboration, says Shin Nakamura*, with challenging market conditions creating the perfect opportunity for companies to adapt and grow.

1.

How are things going at DAIWA? Is the steel industry keeping you busy?

Right now, there isn’t a strong demand in the business sector of Japan, and we are seeing a bigger need and opportunity for consolidation and collaboration across steel companies as the market has shrunk. Also, we see a sign of continued inflation where prices are still going up. For us, this is a critical and important time to adapt and adjust to these market conditions that will shape the trajectory of companies in the steel industry.

2.

What is your view on the current state of the global steel industry?

In the steel industry, we are confronting environmental challenges and actively exploring strategies to address issues such as reducing our carbon footprint, transitioning to greener solutions, and adopting green steel practices. Additionally, we are contending with geopolitical challenges that introduce complexities to the steel landscape, including significant price differentials between the US, Asia, and Europe.

The current geopolitical climate, especially the trade relations between the US and China, exerts substantial influence over global steel prices. Therefore, this is a critical juncture for us, characterized by increased volatility compared to previous periods.

3.

In which sector of the steel industry does DAIWA mostly conduct its business?

Our primary focus is on the construction material business in Japan, with scaffolding being our most significant market segment, accounting for over half of our sales.

4.

Where in the world are you busiest at present?

As a group, we have a presence in the US, capitalizing on state-of-the-art galvanizing technology. Additionally, we have strategic

partnerships, such as with Daiwa Lance in Vietnam, which operates a factory in Ho Chi Minh City and serves over 250 customers across 50 countries.

5.

Can you discuss any major steel contracts you are currently working on?

As a one-to-one group, we are witnessing increasing opportunities for deals and technology adoptions, particularly in India, other BRICS countries like Brazil, and selected nations in the Middle East. The potential for consolidation in Japan also looks promising.

Shin Nakamura

6.

Where does DAIWA stand on the aluminium versus steel argument?

While certain sectors, such as automotive, may experience a shift toward aluminium – illustrated by companies like Tesla adopting aluminium chassis – the economic viability of such transitions remains a challenge. In many industries, steel holds a deep-rooted position and enjoys broad acceptance. From an economic perspective, transitioning from steel to aluminium, in my opinion, doesn’t make sense.

7.

What are your views on Industry 4.0 and steelmaking and how, if at all, is DAIWA using it?

Steel tube manufacturing, in comparison to steel processing itself, relies significantly on human and manual labour with less reliance on process automation. Considering factors such as the current state of the economy in Japan, the ageing population, and the challenge of attracting younger talent to this industry, it becomes imperative for us to make substantial investments in Industry 4.0.

We recognize the necessity to enhance intangible assets within the company, such as the transfer of know-how to the younger generation of workers. Our commitment to adopting Industry 4.0 in manufacturing is further demonstrated by our application for the Lighthouse initiative, showcasing our efforts in this transformative journey.

8.

Hydrogen steelmaking appears to be the next big thing. What’s your view?

We see some successful examples of hydrogen steelmaking in Scandinavian countries. Performing this process requires specific iron ore with higher purity, which is easier to mine in those regions.

Japanese steel companies are now receiving government incentives to pursue this technology, but it’s 10-15 years away rather than five in APAC. We are likely to see interim technology adoption (mini-mill type of approach) rather than near-term widespread adoption at scale.

9.

In your dealings with steel producers, are you finding that they are looking to companies like DAIWA to offer them solutions in terms of energy efficiency and sustainability? If so, what can you offer them?

Our Industry 4.0 approach sets us apart, with a key focus on achieving better yield, optimizing energy usage, and enhancing overall operational efficiency.

*President, Daiwa Steel Tube Industries January/February 2024

perspectives.indd 1

www.steeltimesint.com

22/01/2024 11:50:44

PERSPECTIVES Q&A: DAIWA STEEL TUBE INDUSTRIES

We’ve embraced IoT technology, machine learning, and artificial intelligence, leveraging data to improve operational procedures. What we offer is expertise in leveraging these tools to make operations more sustainable, effectively meeting ESG requirements.

10. How quickly has the steel industry responded to ‘green politics’ in terms of making the production process more environmentally friendly and are they succeeding or fighting a losing battle?

Concrete and steel are among the most impactful materials in terms of carbon footprint. Nevertheless, I believe the steel industry has a clear direction on how to address these challenges. The real difficulty lies in finding the balance between adopting practices to achieve sustainable development goals and minimizing environmental stress without compromising production. To navigate this, it’s crucial to define the authentic meaning of clean policies and establish a consensus.

11. Where does DAIWA lead the field in terms of steel production technology?

Our focus is on collaborating with steel makers to advance the use of high-tensile steel sheets. This collaborative effort aims to streamline processes and make handling these materials easier while ensuring adherence to market-quality standards.

Our ongoing work involves demonstrating the economic and ecological benefits of incorporating such steel. This collaborative approach extends across various sectors, including scaffolding, agriculture, and other industries with which we engage.

12. How do you view DAIWA’s development over the short-tomedium term in relation to the global steel industry?

On the international front, our strategy involves not only importing knowledge and experience in technology but also sharing know-how in practices and procedures.

This expertise could be beneficially applied to emerging economies such as India, China, or the Middle West to enhance competitiveness and environmental sustainability.

In the short-to-medium term, our focus is on identifying strong and enduring partnerships. www.steeltimesint.com

perspectives.indd 2

13. China dominates global crude steel production. How should the industry react to this situation?

It is a reality that demands a careful and balanced industry response. It’s important not to hinder China’s development but to strike a delicate equilibrium. Given China’s significant influence, the approach should involve supporting initiatives that reduce the supply side and enhance measures to manage demand effectively.

14. What is DAIWA’s experience of the Chinese steel industry?

I had the opportunity to visit there before the pandemic, and during that time, I observed notable advancements in their steel production technology and the implementation of Industry 4.0. The Chinese industry employs a different industrial design, exemplified by their mini-mill approach with smaller and more spread-out locations.

We anticipate that the Chinese steel industry will continue to evolve, becoming more sophisticated not only in primary steel production but also in secondary processes.

15. Where do you see most innovation in terms of production technologies – primary, secondary or more downstream?

We observe the most innovation in terms of primary production technologies, which have the most significant impact from an ecological standpoint. Additionally, innovation is occurring downstream. It’s crucial to strike a good balance between these aspects, as innovations are not only about creating products but also about how we store, distribute, process, and sell them. The interconnected information in these areas contributes to making steel production more harmonized, effective, and efficient.

16. How optimistic are you for the global steel industry going forward and what challenges do global producers face in the short-to-medium term?

I hold an optimistic view of the steel industry as a whole. The challenge lies in achieving a sense of wholeness and making informed decisions as an industry, particularly regarding issues like geopolitical tensions between the US and China, as well as crucial environmental concerns. In the short-to-medium term, geopolitical tensions

51

are likely to persist. Therefore, we need to ensure we keep up with operational manufacturing technology to enhance our competitiveness and effectively navigate these challenges.

17. What exhibitions and conferences will DAIWA be attending over the next six months?

We are considering participation in the in tube event in Germany. Additionally, we are extending our efforts for a more broad scope in the lighthouse initiative.

18. DAIWA is headquartered in Singapore; what’s happening steelwise in the country?

While our holding company is based in Singapore, our primary and largest operations are situated in Japan. This is a time for adjusting the industry structure towards consolidations and preparing for factors that are impacting the state of the economy in Japan.

19. Apart from strong coffee, what keeps you awake at night?

Apart from coffee, what keeps me awake at night are the collaborations, partnership deals, and new opportunities in various fields. What keeps me awake is figuring out how to seize the right opportunity at the right time.

20. If you possessed a superpower, how would you use it to improve the global steel industry?

If I possessed a superpower, it would be the ability to navigate and understand the tension between us and China, foreseeing future developments. Furthermore, fostering a deeper understanding and a sense of wholeness within the industry is crucial. That’s our current train of thought. �

January/February 2024

22/01/2024 11:51:04

52

HISTORY

A vanished plant: Part 1, 1867 – 1899 In the first installment of a two-part feature, we witness the humble beginnings of Calan Iron works, alongside its rapid expansion throughout the late 19th century.

By Dr Romulus Ioan* THE town of Calan, (in German, Klandorf, in Hungarian, Kalán or Pusztakalán) is located in the ironmaking district of Hunedoara County, Transylvania, present day Romania.

The town, some 275km north-west of Bucharest was established over 1,000 years ago by the Dacians, a kingdom of south-eastern Europe originating near the Carpathian Mountains. The Dacians were followed by the Romans, who built bath houses, and later by Christians who built churches.

Located just 18km south-east of the ironmaking town of Hunedoara, the region had already established ironworks (See STI March, April, July/Aug and Sept 2021).

Calan was close to ore deposits at Teliuc and Ghelar, and this, with the decision of the Hungarian State to build a railway to connect Simeria with large coal reserves in the Petroşani area (Valea jiului), was the incentive to build an ironworks at Calan in 1867. At this time, Transylvania was part of the Austro-Hungarian Empire.

Calan Iron works was established by the mining and smelting company Kronstadter Bergbau und Hutten Aktion Verein (KBHV), headquartered in Budapest. KBVH hired the German engineer Otto Gmelin to develop a plan of the steel works with a capacity of 20kt/yr. An investment of 590,000 florins was allocated and the plan was to eventually build four blast furnaces.

To build the site, KBHV brought in Belgian engineer Jossef Massenez, from the Duisburg-Hochfeld factory in Germany. Massenez brought with him a multi-national team of almost 80 people consisting of Belgians, Germans,

Fig 1. Calan Blast Furnaces 1 & 2 in 1895

Fig 2. Profile of the Calan blast furnaces (left) No 1 156.32 m3 in 1901 (Right) No 2 352.3m3 in1900

Hungarians, Czechs and Slovaks. On 25 May 1869, work began on the first blast furnace with a volume of 82m3. This started operating in the winter of 1871. Furnace 2 started up in 1875. The two blast furnaces were surrounded by an octagonal stone wall which supported timber loading platforms to each furnace with the charge brought up by a common elevator situated between the two (Fig 1). The elevator was also made of wood and was powered by a steam engine. The wagons in which raw materials were carried across each bridge were manually pushed and emptied into the blast furnace.

The charging apparatus was of the Lange type, with a central exhaust for the furnace gas. This gas was collected and cleaned for use in the steam boilers and to preheat the air blast for the furnace. Preheating was by a metal recuperator, and the gas supply was

supplemented by burning coal. In 1873, 30 tons of coal from the Petrosani mine was consumed to preheat the air at furnace No 1. By 1896, air preheating at furnace 2 used four Cowper stoves each 24.75m high and 6m in diameter, providing a heat transfer surface of 2150m2 per stove. The air blast was created by two blowers, driven directly by a steam engine. A third blower was installed later. The furnace was cooled by an external water supply.

In 1875, work was completed on a 16.5km narrow gauge railway to connect the Teliuc iron ore mine with the Calan furnaces. The wagons were hauled by a steam locomotive.

In 1876, a foundry was built with two cupola furnaces for melting pig iron.

In 1881, a workshop for rolling steel bars was started which had a capacity of 4kt/ yr. However, regular production stopped

*Executive director of the Resita steelworks, part of Artrom Steel Tubes January/February 2024

History.indd 1

www.steeltimesint.com

22/01/2024 11:18:06

HISTORY

SiO2 Al2O3

CaO

MgO

Fe

Mn

P

S

Calcining loss

9.11

53

Iron ore (limonite) from Teliuc mine

11-12

0.68-1.2

2.2-3.1

1.1-2.5

48-51

3.2

0.009

0.057

Puddling slag

16.2

1.28

1.6

0.51

55.94

7.76

-

0.44

-

Teliuc quarry dolomite

1.7

2.30

30.3

18.36

1.37

0.22

0.035

0.032

45.06

Lime stone

1.2

0.89

51.9

1.33

0.50

0.12

0.020

0.020

42.73

Table 1. Chemical composition of the charge to the Calan blast furnaces (%)

just three years later in 1884, but sporadic operations continued until 1895.

Puddling furnaces to refine the blast furnace pig iron were added along with steam-driven forge hammers and rolling mills to produce wrought iron bars.

In 1898, ownership of the Calan ironworks passed to the Mining and Steelmaking Society of Calan – Kalaner Bergbau und Hütten AG – Kaláni Bánya és Kohó Rt. The new company was funded by the Wiener Bankerein bank and the Hungarian Bank of Industry and Commerce.

The share capital was 9 million kor. The majority of the 50% shares were bought by the Berlin-based Bank für Bergbau und Industrie.

1885-1890

1898

1904

1905

40-45

42.3

45.0

42.8

Fig 3. Ore and iron production 1897-1916 %

Table 2. Yield of pig iron from the ore

Si

Mn

P

S

Grey iron

1.22-3.01

White iron

0.69-1.86

C

Fe

3.08-4.07

0.160-0.162

2.62

0.018-0.141

0.018-0.025

3.58-3.69

91.9 – 97.1

0.020

3.47-3.97

91.3 -93.1

Table 3. Chemical composition of the pig iron obtained at Calan (%)

In 1899, a dam was built on the Strei River along with two locks, two settling basins, two filtration basins, a concrete channel 2,450m long and a collection

basin. � Part 2 of this article will follow developments of the Calan plant into the 20th century.

CONNECTING THE INTERNATIONAL STEEL INDUSTRY

Steel Times International Directory

FROM JUST

£105

Since 1866

www.steeltimesint.com

The Directory is the essential guide to steel manufacturers, producers, suppliers of plant equipment and services to the steel industry. It provides comprehensive listings, product information and key contact details.

FOR MORE INFORMATION ON ADVERTISING OR HOW TO BE LISTED CONTACT: ESME HORN esmehorn@quartzltd.com | +44 (0) 1737 855 136

WWW.STEELTIMESINT.COM

www.steeltimesint.com

STI_Directory_HalfPageAd_PRINT.indd 1

History.indd 2

DIRECTORY 2023 @SteelTimesInt

STI BUYERS GUIDE.indd 1

18/09/2023 12:40:58

January/February 2024 11/10/2023 12:05

22/01/2024 11:18:08

DANIELI AUTOMATION

simplifying

metals complexity

www.dca.it

Via Bonaldo Stringher, 4 33042 Buttrio (UD) Italy Phone +39 0432 518 111 www.digi-met.com www.dca.it

Follow us on Linkedin